The Cyclical Nature of North-South FDI Flows

Levy Yeyati, Eduardo; Panizza, Ugo; Stein, Ernesto H.

dc.creator	Levy Yeyati, Eduardo
dc.creator	Panizza, Ugo
dc.creator	Stein, Ernesto H.
dc.date	2011-02-04T21:22:43Z
dc.date	2011-02-04T21:22:43Z
dc.date	2003-01-01
dc.date	2003-01-01
dc.date.accessioned	2014-09-08T23:21:26Z
dc.date.available	2014-09-08T23:21:26Z
dc.date.issued	2014-09-08
dc.identifier	http://www.iadb.org/en/publications/publication-detail,7101.html?id=6290
dc.identifier.uri	https://saber.ucab.edu.ve/xmlui/handle/123456789/15668
dc.description	In this paper, we examine how the business and interest rate cycles in developed countries affect FDI to developing countries. After aggregating flows into three big source areas (the U.S., Europe and Japan), we find FDI flows to be countercyclical with respect to both output and interest rate cycles in the first two, whereas in Japan they display either no cyclical behavior or mild procyclical behavior. This finding is consistent with the fact that FDI outflows and local investment tend to move in opposite directions during the cycles in the U.S. and Europe, reflecting investors' arbitrage among different investment opportunities. In sum, and contrary to what is usually claimed, we conclude that recessions in industrial countries are likely to increase FDI flows, particularly to those countries with close ties with the U.S. and Europe.
dc.format	ACROBAT
dc.language	en
dc.relation	IDB Working Paper Series
dc.subject	Integração e Comércio
dc.subject	Integration & Trade
dc.subject	Integración y comercio
dc.subject	WP-479
dc.title	The Cyclical Nature of North-South FDI Flows
dc.type	Working Papers