World market integration through the lens of foreign direct investors

By Rui A. Albuquerque, Norman V. Loayza, L. Serven. 2003

218 citations recorded by the source corpus.

The authors analyze the unparalleled increase in foreign direct investment to emerging market economies in the past 25 years. Using a large cross-country time-series data set, the authors evaluate the dependence of foreign direct investment on global factors or worldwide sources of risk (that is, factors that drive foreign direct investment across several countries). They construct a globalization measure that equals the share of explained variation in direct investment attributable to global factors. The authors show that the globalization measure has increased steadily for industrial and developing countries. For the full sample of countries, the globalization measure rose eightfold from 1985 to 1999. Furthermore, in recent years developing countries' exposure to global factors has approached that of industrial countries, particularly for Latin America. Finally, the globalization measure correlates strongly with measures of capital market liberalization. Overall the authors find strong support for the hypothesis of increased market integration which implies a greater role for worldwide sources of risk. They discuss the implications of the results for public policies regarding capital market liberalization and policies directed at attracting foreign investment.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/41ae220df352bf7952377f18556583d1f1f79479

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

In Finance

Citations in the corpus

Terrorism and the world economy (2005, background): “For example, Becker and Murphy (2001) estimated that the September 11th terrorist attacks resulted in a loss of 0.06% of the total productive assets of the US economy. In consequence, after taking into account the four channels mentioned in the previous paragraph, some authors have argued that terro”
Stock market development under globalization : whither the gains from reforms ? (2007, background): “In particular, we include US interest rates and GDP growth in high-income OECD countries to control for the world business cycle and common global 24 For example, Albuquerque et al. (2005) find that common factors across countries are increasingly important in driving foreign direct investment.”
The Effects of Financial Development on Foreign Direct Investment (2014, background): “8 Fernàndez-Arias (2000), Feinberg and Phillips (2004), Albuquerque et al. (2005), Di Giovanni (2005), Hijzen et al. (2008), Baker et al.”
Policy Uncertainty, Irreversibility, and Cross-Border Flows of Capital (2013, unknown): “8See, for example, Albuquerque, Loayza, and Serven(2005), Froot and Stein (1991), and Blonigen (1997) 12 bility ratings are from Political Risk Service’s International Country Risk Guide (ICRG).”
Dependency Revisited: International Markets, Business Cycles, and Social Spending in the Developing World (2006, background): “Focusing on the specific relationship between economic openness and social spending, I hypothesize that the distinct characteristics of these two social spending categories will have implications for how key political actors perceive them and thus how aggressively they will be retrenched in response”