An information-based trade off between foreign direct investment and foreign portfolio investment
Our rough guess is there are 8,750 words in this book.
At a pace averaging 250 words per minute, this book will take 0 hours and 35 minutes to read. With a half hour per day, this will take 1 days to read.
How long will it take you?
This book will take an estimated to read at a reading speed averaging words per minute. With 30 minutes per day, this will take to read.
Enter your reading speedYou can take one of our WPM reading speed tests to find your reading speed.
Create a free account to track your reading progress, build your reading list, and set reading goals.
Author
Contributions
- Razin, Assaf. - Contributor
- National Bureau of Economic Research. - Contributor
Publication
2005 - National Bureau of Economic Research, Cambridge, Mass, Massachusetts
Language
English
Word Count
8,750 words, Guess
Page Count
35 pages
Identifiers
- OCLC Control Number62480031
- Open LibraryOL17628341M
Alternate Titles
- Information-based tradeoff between foreign direct investment and foreign portfolio investment.
Description
"The paper develops a model of foreign direct investments (FDI) and foreign portfolio investments (FPI).The model describes an information-based trade off between direct investments and portfolio investments. Direct investors are more informed about the fundamentals of their projects. This information enables them to manage their projects more efficiently. However, it also creates an asymmetric-information problem in case they need to sell their projects prematurely, and reduces the price they can get in that case. As a result, investors, who know they are more likely to get a liquidity shock that forces them to sell early, are more likely to choose portfolio investments, whereas investors, who know they are less likely to get a liquidity shock, are more likely to choose direct investments. FDI is characterized by hands-on management style which enables the owner to obtain relatively refined information about the productivity of the firm. This superiority of FDI relative to FPI, comes with a cost: a firm owned by the relatively well-informed FDI investor has a low resale price because of a "lemons" type asymmetric information between the owner and potential buyers. The model can explain several stylized facts regarding foreign equity flows, such as the larger ratio of FDI to FPI inflows in developing countries relative to developed countries, and the greater volatility of FDI net inflows relative to FPI net inflows"--National Bureau of Economic Research web site.
Subjects
Links
Other Editions
- An information-based trade off between foreign direct investment and foreign portfolio investment
Reader Reviews
No reviews yet for this book.
Be the first to share your thoughts!