Surges and Stops in FDI Flows to Developing Countries : Does the Mode of Entry Make a Difference?

This paper investigates the factors associated with foreign direct investment "surges" and "stops," defined as sharp increases and decreases, respectively, of gross foreign direct investment inflows to the developing world and d...

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Bibliographic Details
Main Authors: Burger, Martijn J., Ianchovichina, Elena I.
Format: Policy Research Working Paper
Language:English
en_US
Published: World Bank, Washington, DC 2014
Subjects:
GDP
Online Access:http://documents.worldbank.org/curated/en/2014/02/18912430/surges-stops-fdi-flows-developing-countries-mode-entry-make-difference
http://hdl.handle.net/10986/17303
id okr-10986-17303
recordtype oai_dc
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
en_US
topic ACCOUNTING
ANNUAL GROWTH
ARBITRAGEURS
ASSETS
BALANCE SHEET
BANK POLICY
BOND
CAPITAL ACCOUNT
CAPITAL ACCOUNT OPENNESS
CAPITAL CONTROLS
CAPITAL FLOW
CAPITAL FLOWS
CAPITAL INFLOWS
CAPITAL MARKET
CAPITAL TRANSACTIONS
CENTRAL BANK
CONTROL VARIABLES
CORPORATE ASSETS
COUNTRY LEVEL
COUNTRY RISK
COUNTRY SIZE
CREDIT MARKET
CREDIT MARKETS
CROSS-BORDER CAPITAL
CROSS-BORDER MERGERS
CUMULATIVE DISTRIBUTION
CUMULATIVE DISTRIBUTION FUNCTION
CURRENCY
CURRENCY CRISES
CURRENT ACCOUNT
DEBT SERVICE
DEMOCRACY
DEPENDENT VARIABLE
DESCRIPTIVE STATISTICS
DEVELOPED COUNTRIES
DEVELOPING COUNTRIES
DEVELOPING COUNTRY
DEVELOPING ECONOMIES
DEVELOPING WORLD
DEVELOPMENT ECONOMICS
DEVELOPMENT POLICY
DIVERSIFICATION
DOMESTIC MARKETS
DUMMY VARIABLE
DUMMY VARIABLES
ECONOMIC CONDITIONS
ECONOMIC DEVELOPMENTS
ECONOMIC GEOGRAPHY
ECONOMIC GROWTH
ECONOMIC INTEGRATION
ECONOMIC LAW
ECONOMIC RISK
ECONOMIC STABILITY
ECONOMIC STUDIES
ECONOMIC SYSTEMS
EMERGING ECONOMIES
EMERGING MARKET
EMERGING MARKETS
EMPIRICAL EVIDENCE
EMPIRICAL LITERATURE
EMPIRICAL MODELS
EQUITY CAPITAL
ESTIMATION STRATEGIES
ESTIMATION TECHNIQUES
EXCHANGE RATE
EXCHANGE RATE STABILITY
EXPLANATORY VARIABLES
EXPORTS
EXPOSURE
EXTERNAL FINANCING
FINANCIAL CAPITAL
FINANCIAL CRISES
FINANCIAL FLOW
FINANCIAL FLOWS
FINANCIAL INSTABILITY
FINANCIAL MARKET
FINANCIAL MARKETS
FINANCIAL OPENNESS
FINANCIAL RISK
FINANCIAL SECTOR
FINANCIAL STABILITY
FINANCIAL STUDIES
FIRM ASSETS
FOREIGN CAPITAL
FOREIGN DEBT
FOREIGN DEBT SERVICE
FOREIGN DIRECT INVESTMENT
FOREIGN DIRECT INVESTMENTS
FOREIGN FIRMS
FOREIGN INVESTORS
FOREIGN MARKET
FOREIGN OWNERSHIP
GDP
GDP PER CAPITA
GLOBAL ECONOMY
GLOBAL FINANCIAL MARKETS
GLOBAL LEVEL
GLOBAL LIQUIDITY
GLOBAL MARKETS
GLOBAL RISK
GOVERNMENT INTERVENTIONS
GOVERNMENT POLICIES
GROWTH RATE
GROWTH RATES
HOST COUNTRIES
HOST COUNTRY
HOST ECONOMIES
HUMAN CAPITAL
IMPORT
IMPORTS
INCOME
INCOME LEVEL
INCOME LEVELS
INCOMES
INDEPENDENT VARIABLES
INFLATION
INFLATION RATE
INFLOWS OF CAPITAL
INTEREST RATE
INTERNATIONAL BANK
INTERNATIONAL BUSINESS
INTERNATIONAL ECONOMICS
INTERNATIONAL FINANCE
INTERNATIONAL FINANCIAL STATISTICS
INTERNATIONAL MONEY
INTERNATIONAL STANDARDS
INTERNATIONAL TRADE
INTERNATIONAL TRANSACTIONS
INVESTING
INVESTMENT INFLOWS
JOINT VENTURES
LEADING INDICATORS
LEVERAGE
LIQUIDITY CRISES
LOCAL CURRENCY
LONG-TERM BOND YIELDS
LONG-TERM CAPITAL
LOW-INCOME COUNTRIES
LOW-INCOME ECONOMIES
MACROECONOMIC EFFECTS
MACROECONOMIC ENVIRONMENTS
MACROECONOMIC MANAGEMENT
MACROECONOMIC UNCERTAINTY
MACROECONOMIC VOLATILITY
MACROECONOMICS
MARKET COMPETITION
MARKET ENTRY
MARKET POWER
MARKET STRUCTURE
MARKET VALUATIONS
MEAN VALUE
MONETARY ECONOMICS
MONETARY FUND
NATURAL RESOURCE
NATURAL RESOURCES
NET CAPITAL
OPEN ECONOMIES
OUTPUT
PER CAPITA INCOME
PER CAPITA INCOME LEVELS
PER CAPITA INCOMES
POLICY ANALYSIS
POLICY MAKERS
POLICY RESEARCH
POLICY RESPONSES
POLITICAL DETERMINANTS
POLITICAL ECONOMY
POLITICAL INSTABILITY
POLITICAL REGIMES
POLITICAL RISK
POLITICAL STABILITY
POOR COUNTRIES
PRICE VOLATILITY
PRIVATE SECTOR CREDIT
PRODUCTION COSTS
PROTECTIONISM
REAL GDP
REINVESTMENT
REINVESTMENT OF EARNINGS
RELATIVE PRICE
RICH COUNTRIES
ROBUSTNESS CHECKS
SHORT-TERM CAPITAL
SIGNIFICANT EFFECT
SLOWDOWNS
STANDARD DEVIATION
STANDARD DEVIATIONS
STOCK MARKET
STOCK MARKET CAPITALIZATION
TAKEOVER
TECHNOLOGY TRANSFER
TRADE OPENNESS
UNCERTAINTY
VOLATILITY
WELFARE IMPACT
WORLD DEVELOPMENT INDICATORS
WORLD ECONOMY
WORLD INVESTMENT REPORT
WORLD TRADE
spellingShingle ACCOUNTING
ANNUAL GROWTH
ARBITRAGEURS
ASSETS
BALANCE SHEET
BANK POLICY
BOND
CAPITAL ACCOUNT
CAPITAL ACCOUNT OPENNESS
CAPITAL CONTROLS
CAPITAL FLOW
CAPITAL FLOWS
CAPITAL INFLOWS
CAPITAL MARKET
CAPITAL TRANSACTIONS
CENTRAL BANK
CONTROL VARIABLES
CORPORATE ASSETS
COUNTRY LEVEL
COUNTRY RISK
COUNTRY SIZE
CREDIT MARKET
CREDIT MARKETS
CROSS-BORDER CAPITAL
CROSS-BORDER MERGERS
CUMULATIVE DISTRIBUTION
CUMULATIVE DISTRIBUTION FUNCTION
CURRENCY
CURRENCY CRISES
CURRENT ACCOUNT
DEBT SERVICE
DEMOCRACY
DEPENDENT VARIABLE
DESCRIPTIVE STATISTICS
DEVELOPED COUNTRIES
DEVELOPING COUNTRIES
DEVELOPING COUNTRY
DEVELOPING ECONOMIES
DEVELOPING WORLD
DEVELOPMENT ECONOMICS
DEVELOPMENT POLICY
DIVERSIFICATION
DOMESTIC MARKETS
DUMMY VARIABLE
DUMMY VARIABLES
ECONOMIC CONDITIONS
ECONOMIC DEVELOPMENTS
ECONOMIC GEOGRAPHY
ECONOMIC GROWTH
ECONOMIC INTEGRATION
ECONOMIC LAW
ECONOMIC RISK
ECONOMIC STABILITY
ECONOMIC STUDIES
ECONOMIC SYSTEMS
EMERGING ECONOMIES
EMERGING MARKET
EMERGING MARKETS
EMPIRICAL EVIDENCE
EMPIRICAL LITERATURE
EMPIRICAL MODELS
EQUITY CAPITAL
ESTIMATION STRATEGIES
ESTIMATION TECHNIQUES
EXCHANGE RATE
EXCHANGE RATE STABILITY
EXPLANATORY VARIABLES
EXPORTS
EXPOSURE
EXTERNAL FINANCING
FINANCIAL CAPITAL
FINANCIAL CRISES
FINANCIAL FLOW
FINANCIAL FLOWS
FINANCIAL INSTABILITY
FINANCIAL MARKET
FINANCIAL MARKETS
FINANCIAL OPENNESS
FINANCIAL RISK
FINANCIAL SECTOR
FINANCIAL STABILITY
FINANCIAL STUDIES
FIRM ASSETS
FOREIGN CAPITAL
FOREIGN DEBT
FOREIGN DEBT SERVICE
FOREIGN DIRECT INVESTMENT
FOREIGN DIRECT INVESTMENTS
FOREIGN FIRMS
FOREIGN INVESTORS
FOREIGN MARKET
FOREIGN OWNERSHIP
GDP
GDP PER CAPITA
GLOBAL ECONOMY
GLOBAL FINANCIAL MARKETS
GLOBAL LEVEL
GLOBAL LIQUIDITY
GLOBAL MARKETS
GLOBAL RISK
GOVERNMENT INTERVENTIONS
GOVERNMENT POLICIES
GROWTH RATE
GROWTH RATES
HOST COUNTRIES
HOST COUNTRY
HOST ECONOMIES
HUMAN CAPITAL
IMPORT
IMPORTS
INCOME
INCOME LEVEL
INCOME LEVELS
INCOMES
INDEPENDENT VARIABLES
INFLATION
INFLATION RATE
INFLOWS OF CAPITAL
INTEREST RATE
INTERNATIONAL BANK
INTERNATIONAL BUSINESS
INTERNATIONAL ECONOMICS
INTERNATIONAL FINANCE
INTERNATIONAL FINANCIAL STATISTICS
INTERNATIONAL MONEY
INTERNATIONAL STANDARDS
INTERNATIONAL TRADE
INTERNATIONAL TRANSACTIONS
INVESTING
INVESTMENT INFLOWS
JOINT VENTURES
LEADING INDICATORS
LEVERAGE
LIQUIDITY CRISES
LOCAL CURRENCY
LONG-TERM BOND YIELDS
LONG-TERM CAPITAL
LOW-INCOME COUNTRIES
LOW-INCOME ECONOMIES
MACROECONOMIC EFFECTS
MACROECONOMIC ENVIRONMENTS
MACROECONOMIC MANAGEMENT
MACROECONOMIC UNCERTAINTY
MACROECONOMIC VOLATILITY
MACROECONOMICS
MARKET COMPETITION
MARKET ENTRY
MARKET POWER
MARKET STRUCTURE
MARKET VALUATIONS
MEAN VALUE
MONETARY ECONOMICS
MONETARY FUND
NATURAL RESOURCE
NATURAL RESOURCES
NET CAPITAL
OPEN ECONOMIES
OUTPUT
PER CAPITA INCOME
PER CAPITA INCOME LEVELS
PER CAPITA INCOMES
POLICY ANALYSIS
POLICY MAKERS
POLICY RESEARCH
POLICY RESPONSES
POLITICAL DETERMINANTS
POLITICAL ECONOMY
POLITICAL INSTABILITY
POLITICAL REGIMES
POLITICAL RISK
POLITICAL STABILITY
POOR COUNTRIES
PRICE VOLATILITY
PRIVATE SECTOR CREDIT
PRODUCTION COSTS
PROTECTIONISM
REAL GDP
REINVESTMENT
REINVESTMENT OF EARNINGS
RELATIVE PRICE
RICH COUNTRIES
ROBUSTNESS CHECKS
SHORT-TERM CAPITAL
SIGNIFICANT EFFECT
SLOWDOWNS
STANDARD DEVIATION
STANDARD DEVIATIONS
STOCK MARKET
STOCK MARKET CAPITALIZATION
TAKEOVER
TECHNOLOGY TRANSFER
TRADE OPENNESS
UNCERTAINTY
VOLATILITY
WELFARE IMPACT
WORLD DEVELOPMENT INDICATORS
WORLD ECONOMY
WORLD INVESTMENT REPORT
WORLD TRADE
Burger, Martijn J.
Ianchovichina, Elena I.
Surges and Stops in FDI Flows to Developing Countries : Does the Mode of Entry Make a Difference?
geographic_facet Middle East and North Africa
relation Policy Research Working Paper;No. 6771
description This paper investigates the factors associated with foreign direct investment "surges" and "stops," defined as sharp increases and decreases, respectively, of gross foreign direct investment inflows to the developing world and differentiated based on whether these events are led by waves in greenfield investments or mergers and acquisitions. Greenfield-led surges and stops occur more frequently than mergers and acquisitions-led ones and different factors are associated with the onset of the two types of events. Global liquidity is the only factor significantly associated with a surge, regardless of its kind, while decline in global economic growth and a surge in the preceding year are the only predictors of a stop. Greenfield-led surges and stops are more likely in low-income and resource-rich countries than elsewhere. Global growth, financial openness, and domestic economic and financial instability enable mergers and acquisitions-led surges. These results differ from those in the literature on surges and stops and are particularly relevant in countries where foreign direct investments dominate capital flows.
format Publications & Research :: Policy Research Working Paper
author Burger, Martijn J.
Ianchovichina, Elena I.
author_facet Burger, Martijn J.
Ianchovichina, Elena I.
author_sort Burger, Martijn J.
title Surges and Stops in FDI Flows to Developing Countries : Does the Mode of Entry Make a Difference?
title_short Surges and Stops in FDI Flows to Developing Countries : Does the Mode of Entry Make a Difference?
title_full Surges and Stops in FDI Flows to Developing Countries : Does the Mode of Entry Make a Difference?
title_fullStr Surges and Stops in FDI Flows to Developing Countries : Does the Mode of Entry Make a Difference?
title_full_unstemmed Surges and Stops in FDI Flows to Developing Countries : Does the Mode of Entry Make a Difference?
title_sort surges and stops in fdi flows to developing countries : does the mode of entry make a difference?
publisher World Bank, Washington, DC
publishDate 2014
url http://documents.worldbank.org/curated/en/2014/02/18912430/surges-stops-fdi-flows-developing-countries-mode-entry-make-difference
http://hdl.handle.net/10986/17303
_version_ 1764436849392091136
spelling okr-10986-173032021-04-23T14:03:37Z Surges and Stops in FDI Flows to Developing Countries : Does the Mode of Entry Make a Difference? Burger, Martijn J. Ianchovichina, Elena I. ACCOUNTING ANNUAL GROWTH ARBITRAGEURS ASSETS BALANCE SHEET BANK POLICY BOND CAPITAL ACCOUNT CAPITAL ACCOUNT OPENNESS CAPITAL CONTROLS CAPITAL FLOW CAPITAL FLOWS CAPITAL INFLOWS CAPITAL MARKET CAPITAL TRANSACTIONS CENTRAL BANK CONTROL VARIABLES CORPORATE ASSETS COUNTRY LEVEL COUNTRY RISK COUNTRY SIZE CREDIT MARKET CREDIT MARKETS CROSS-BORDER CAPITAL CROSS-BORDER MERGERS CUMULATIVE DISTRIBUTION CUMULATIVE DISTRIBUTION FUNCTION CURRENCY CURRENCY CRISES CURRENT ACCOUNT DEBT SERVICE DEMOCRACY DEPENDENT VARIABLE DESCRIPTIVE STATISTICS DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPING WORLD DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIVERSIFICATION DOMESTIC MARKETS DUMMY VARIABLE DUMMY VARIABLES ECONOMIC CONDITIONS ECONOMIC DEVELOPMENTS ECONOMIC GEOGRAPHY ECONOMIC GROWTH ECONOMIC INTEGRATION ECONOMIC LAW ECONOMIC RISK ECONOMIC STABILITY ECONOMIC STUDIES ECONOMIC SYSTEMS EMERGING ECONOMIES EMERGING MARKET EMERGING MARKETS EMPIRICAL EVIDENCE EMPIRICAL LITERATURE EMPIRICAL MODELS EQUITY CAPITAL ESTIMATION STRATEGIES ESTIMATION TECHNIQUES EXCHANGE RATE EXCHANGE RATE STABILITY EXPLANATORY VARIABLES EXPORTS EXPOSURE EXTERNAL FINANCING FINANCIAL CAPITAL FINANCIAL CRISES FINANCIAL FLOW FINANCIAL FLOWS FINANCIAL INSTABILITY FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL OPENNESS FINANCIAL RISK FINANCIAL SECTOR FINANCIAL STABILITY FINANCIAL STUDIES FIRM ASSETS FOREIGN CAPITAL FOREIGN DEBT FOREIGN DEBT SERVICE FOREIGN DIRECT INVESTMENT FOREIGN DIRECT INVESTMENTS FOREIGN FIRMS FOREIGN INVESTORS FOREIGN MARKET FOREIGN OWNERSHIP GDP GDP PER CAPITA GLOBAL ECONOMY GLOBAL FINANCIAL MARKETS GLOBAL LEVEL GLOBAL LIQUIDITY GLOBAL MARKETS GLOBAL RISK GOVERNMENT INTERVENTIONS GOVERNMENT POLICIES GROWTH RATE GROWTH RATES HOST COUNTRIES HOST COUNTRY HOST ECONOMIES HUMAN CAPITAL IMPORT IMPORTS INCOME INCOME LEVEL INCOME LEVELS INCOMES INDEPENDENT VARIABLES INFLATION INFLATION RATE INFLOWS OF CAPITAL INTEREST RATE INTERNATIONAL BANK INTERNATIONAL BUSINESS INTERNATIONAL ECONOMICS INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL MONEY INTERNATIONAL STANDARDS INTERNATIONAL TRADE INTERNATIONAL TRANSACTIONS INVESTING INVESTMENT INFLOWS JOINT VENTURES LEADING INDICATORS LEVERAGE LIQUIDITY CRISES LOCAL CURRENCY LONG-TERM BOND YIELDS LONG-TERM CAPITAL LOW-INCOME COUNTRIES LOW-INCOME ECONOMIES MACROECONOMIC EFFECTS MACROECONOMIC ENVIRONMENTS MACROECONOMIC MANAGEMENT MACROECONOMIC UNCERTAINTY MACROECONOMIC VOLATILITY MACROECONOMICS MARKET COMPETITION MARKET ENTRY MARKET POWER MARKET STRUCTURE MARKET VALUATIONS MEAN VALUE MONETARY ECONOMICS MONETARY FUND NATURAL RESOURCE NATURAL RESOURCES NET CAPITAL OPEN ECONOMIES OUTPUT PER CAPITA INCOME PER CAPITA INCOME LEVELS PER CAPITA INCOMES POLICY ANALYSIS POLICY MAKERS POLICY RESEARCH POLICY RESPONSES POLITICAL DETERMINANTS POLITICAL ECONOMY POLITICAL INSTABILITY POLITICAL REGIMES POLITICAL RISK POLITICAL STABILITY POOR COUNTRIES PRICE VOLATILITY PRIVATE SECTOR CREDIT PRODUCTION COSTS PROTECTIONISM REAL GDP REINVESTMENT REINVESTMENT OF EARNINGS RELATIVE PRICE RICH COUNTRIES ROBUSTNESS CHECKS SHORT-TERM CAPITAL SIGNIFICANT EFFECT SLOWDOWNS STANDARD DEVIATION STANDARD DEVIATIONS STOCK MARKET STOCK MARKET CAPITALIZATION TAKEOVER TECHNOLOGY TRANSFER TRADE OPENNESS UNCERTAINTY VOLATILITY WELFARE IMPACT WORLD DEVELOPMENT INDICATORS WORLD ECONOMY WORLD INVESTMENT REPORT WORLD TRADE This paper investigates the factors associated with foreign direct investment "surges" and "stops," defined as sharp increases and decreases, respectively, of gross foreign direct investment inflows to the developing world and differentiated based on whether these events are led by waves in greenfield investments or mergers and acquisitions. Greenfield-led surges and stops occur more frequently than mergers and acquisitions-led ones and different factors are associated with the onset of the two types of events. Global liquidity is the only factor significantly associated with a surge, regardless of its kind, while decline in global economic growth and a surge in the preceding year are the only predictors of a stop. Greenfield-led surges and stops are more likely in low-income and resource-rich countries than elsewhere. Global growth, financial openness, and domestic economic and financial instability enable mergers and acquisitions-led surges. These results differ from those in the literature on surges and stops and are particularly relevant in countries where foreign direct investments dominate capital flows. 2014-03-18T19:55:37Z 2014-03-18T19:55:37Z 2014-02 http://documents.worldbank.org/curated/en/2014/02/18912430/surges-stops-fdi-flows-developing-countries-mode-entry-make-difference http://hdl.handle.net/10986/17303 English en_US Policy Research Working Paper;No. 6771 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Middle East and North Africa