The Evidence and Impact of Financial Globalization

Chapter 22

Role of Multinational Corporations in Financial Globalization

S. Kalemli-Ozcan*,^† and C. Villegas-Sanchez*

^*University of Houston, Houston, TX, USA

^†NBER, Cambridge, MA, USA

Outline

Introduction

What are the Determinants of FDI?

Macroeconomic Evidence

Microeconomic Evidence

Are there any Growth Effects of FDI?

Foreign Investment, Volatility, and Crises

Conclusion

References

Introduction

The recent wave of financial globalization started in the early 1990s with increased cross-border capital flows among the industrial world and quickly spread to emerging markets. Many of these developing countries opened up their capital accounts in anticipation of net growth benefits from foreign investment, which is supposed to result from efficient ...