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Risk And The Technology Content Of Fdi: A Dynamic Model, Pao Li Chang, Chia-Hui Lu
Risk And The Technology Content Of Fdi: A Dynamic Model, Pao Li Chang, Chia-Hui Lu
Research Collection School Of Economics
This paper incorporates risk into the FDI decisions of firms. The risk of FDI failure increases with the gap between the South's technology frontier and the technology complexity of a firm's product. This leads to a double-crossing sorting pattern of FDI—firms of intermediate technology levels are more likely than others to undertake FDI. It is with the attempt to relax the upper bound of the technology content of FDI, we argue, that many FDI policies are created. The theory's predictions are consistent with the empirical patterns of FDI in China by US and Taiwanese manufacturing firms.
Micro-Finance Competition With Motivated Mfis, Brishti Guha, Prabal Roy Chowdhury
Micro-Finance Competition With Motivated Mfis, Brishti Guha, Prabal Roy Chowdhury
Research Collection School Of Economics
In this paper we examine the effect of increased MFI competition, focusing on its implications for borrower targeting, both in the presence and the absence of double-dipping. In the absence of competition we find that the loans are more likely to go to relatively richer borrowers whenever inequality is not too large, and the technology is sufficiently convex. In the presence of competition, the results depend on whether double-dipping is feasible or not. In case double-dipping is not feasible, we find that the MFIs necessarily target the richer borrowers. Interestingly, it turns out that double-dipping may encourage the MFIs to …