An information-based trade off between foreign direct investment and foreign portfolio investment

• 成果类型: Article
• 署名作者: Goldstein, Itay; Razin, Assaf
• 署名单位: University of Pennsylvania; Tel Aviv University; Cornell University; Centre for Economic Policy Research - UK; National Bureau of Economic Research
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2005.12.002
• 发表日期: 2006
• 页码: 271-295
• 关键词: foreign direct investment; Foreign portfolio investment; corporate control; liquidity; TRANSPARENCY

摘要

The paper develops a model of foreign direct investments (FDI) and foreign portfolio investments (FPI). FDI enables the owner to obtain refined information about the firm. This superiority, relative to FPI, comes with a cost: a firm owned by the FDI investor has a low resale price because of 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. (c) 2006 Elsevier B.V. All rights reserved.