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Full-Text Articles in International Economics
International Capital Flows With Limited Commitment And Incomplete Markets, Jürgen Von Hagen, Haiping Zhang
International Capital Flows With Limited Commitment And Incomplete Markets, Jürgen Von Hagen, Haiping Zhang
Research Collection School Of Economics
Recent literature has proposed two alternative types of financial frictions, i.e., limited commitment and incomplete markets, to explain the patterns of international capital flows between developed and developing countries observed in the past two decades. This paper integrates both types of frictions into a two-country overlapping-generations framework to facilitate a direct comparison of their effects. In our model, limited commitment distorts the investment made by agents with different productivity, which creates a wedge between the interest rates on equity capital vs. credit capital; while incomplete markets distort the investment among projects with different riskiness, which creates a wedge between the …
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 pattern of FDI in China by US and Taiwanese manufacturing firms.
The Gift That Keeps Giving: Fdi Inflows In China, Joseph Chang
The Gift That Keeps Giving: Fdi Inflows In China, Joseph Chang
CMC Senior Theses
This paper investigates the primacy of foreign direct investment inflows in liberalizing China’s economy and whether the long-term gains from economic openness will justify its inefficient energy uses and growing regional income disparities. By examining the history of FDI inflows in China, it becomes evident that FDI inflows were an instrumental part in institutional and technological development in China. I extend the argument to take into account how these developed infrastructures react to China’s growing energy demand in light of a shrinking world supply. Lastly, I perform a meta-analysis on the Environmental Kuznets Curve theory and the Pollution Haven Hypothesis, …
Reconsidering International Tax Neutrality, Michael S. Knoll
Reconsidering International Tax Neutrality, Michael S. Knoll
All Faculty Scholarship
For decades, U.S. international tax policy has shifted back and forth between territorial-source-exemption taxation and worldwide-residence-credit taxation. The former is generally associated with capital import neutrality (CIN) and the latter with capital export neutrality (CEN). One reason why national tax policy has shifted back and forth between those benchmarks is because it is widely accepted that a tax system cannot simultaneously satisfy both CEN and CIN unless tax rates on capital are harmonized across jurisdictions. In this essay, I argue that the international tax literature contains two different and conflicting definitions for CIN. Under one definition, which goes back at …
Issues On International Trade And Investment And Its Implications For Further Research, Angelo B. Taningco
Issues On International Trade And Investment And Its Implications For Further Research, Angelo B. Taningco
Angelo King Institute for Economic and Business Studies (AKI)
Recent developments in the field of international trade and investments worldwide have led to contemporary literature that encompass international trade in goods and services, trade policies, bilateral and regional free trade agreements (FTAs) as well as multilateral trading arrangements, trade facilitation measures, and foreign direct investment (FDI) policies. Given the increasing significance of multilateral trade and FDI flows between regions in recent years, there is a need of further research especially for developing countries like the Philippines. As such, it will be possible to develop efficient trade and investment policies, which relate to inclusive growth and development. Results suggest that …