Substitution between Foreign Capital in China, India, the Rest of the World, and Latin America : Much Ado about Nothing?
This paper explores the impact of the emergence of China and India on foreign capital stocks in other economies. Using bilateral data from 1990-2003 and drawing from the knowledge-capital model of the multinational enterprises to control for fundam...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2007/09/8339154/substitution-between-foreign-capital-china-india-rest-world-latin-america-much-ado-nothing-substitution-between-foreign-capital-china-india-rest-world-latin-america-much-ado-nothing http://hdl.handle.net/10986/7338 |
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okr-10986-73382021-04-23T14:02:34Z Substitution between Foreign Capital in China, India, the Rest of the World, and Latin America : Much Ado about Nothing? Cravino, Javier Lederman, Daniel Olarreaga, Marcelo ABSOLUTE VALUE ACCOUNTING AGRICULTURE BENCHMARK BENCHMARK SPECIFICATION BILATERAL TRADE BILATERAL TRADE DATA CAPITAL STOCKS CENTRAL AMERICA CENTRAL AMERICAN CONSUMER PRICE INDEX CONTROL VARIABLES CURRENCY DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPMENT BANK ECONOMETRIC ANALYSES ECONOMETRIC MODELS ECONOMIC GROWTH EMERGING ECONOMIES EXCHANGE RATE EXPECTED VALUE EXPLANATORY VARIABLES EXPORTS FDI FEDERAL RESERVE FEDERAL RESERVE SYSTEM FINANCIAL SUPPORT FIXED EFFECT FIXED EFFECTS FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT FOREIGN INVESTORS FUNDAMENTAL DETERMINANTS GDP GDP PER CAPITA GLOBAL BUSINESS GLOBAL ECONOMY GRAVITY MODEL GROWTH RATE HOST COUNTRIES HOST COUNTRY HOST ECONOMIES HOST-COUNTRY IMPORTS INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL INVESTMENT INTERNATIONAL TRADE INVESTING INVESTMENT FLOWS LABOR FORCE LATIN AMERICAN MACROECONOMIC VOLATILITY MANUFACTURING MANUFACTURING INDUSTRIES MANUFACTURING SECTOR MARKET EXCHANGE RATE MARKET SIZE MARKETING MONETARY FUND MULTINATIONAL ENTERPRISE MULTINATIONAL ENTERPRISES NATIONAL CURRENCY NATURAL RESOURCE NATURAL RESOURCES NET EXPORTS PATENTS POLITICAL INSTABILITY POLITICAL RISK POLITICAL STABILITY POSITIVE COEFFICIENT POSITIVE EFFECTS PRODUCTION PROCESSES PUBLIC FINANCE R&D REAL EXCHANGE RATE REAL GDP RESULT RESULTS ROBUSTNESS CHECK SEARCH SLOWDOWN STANDARD DEVIATION SUBSTITUTION EFFECT TAX TOTAL MARKET TRADE REFORMS TREATIES TRINIDAD AND TOBAGO VALUE ADDED VERTICAL INTEGRATION WAGES WEB WORLD DEVELOPMENT INDICATORS WTO This paper explores the impact of the emergence of China and India on foreign capital stocks in other economies. Using bilateral data from 1990-2003 and drawing from the knowledge-capital model of the multinational enterprises to control for fundamental determinants of foreign capital stocks across countries, the evidence suggests that the impact of foreign capital in China and India on other countries' foreign capital stocks has been positive. This finding is robust to the use of ordinary least squares, Poisson, and negative binomial estimators; to the inclusion of time and country-pair fixed effects; to the inclusion of natural-resource endowments; and to the use of the sum of foreign capital stocks in Hong Kong (China) and mainland China instead of using only the latter's foreign capital stocks. There is surprisingly weak evidence of substitution in manufacturing foreign capital stocks away from Central America and Mexico in favor of China, and from the Southern Cone countries to India, but these findings are not robust to the use of alternative estimation techniques. 2012-06-06T20:54:03Z 2012-06-06T20:54:03Z 2007-09 http://documents.worldbank.org/curated/en/2007/09/8339154/substitution-between-foreign-capital-china-india-rest-world-latin-america-much-ado-nothing-substitution-between-foreign-capital-china-india-rest-world-latin-america-much-ado-nothing http://hdl.handle.net/10986/7338 English Policy Research Working Paper; No. 4361 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Latin America China India |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ABSOLUTE VALUE ACCOUNTING AGRICULTURE BENCHMARK BENCHMARK SPECIFICATION BILATERAL TRADE BILATERAL TRADE DATA CAPITAL STOCKS CENTRAL AMERICA CENTRAL AMERICAN CONSUMER PRICE INDEX CONTROL VARIABLES CURRENCY DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPMENT BANK ECONOMETRIC ANALYSES ECONOMETRIC MODELS ECONOMIC GROWTH EMERGING ECONOMIES EXCHANGE RATE EXPECTED VALUE EXPLANATORY VARIABLES EXPORTS FDI FEDERAL RESERVE FEDERAL RESERVE SYSTEM FINANCIAL SUPPORT FIXED EFFECT FIXED EFFECTS FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT FOREIGN INVESTORS FUNDAMENTAL DETERMINANTS GDP GDP PER CAPITA GLOBAL BUSINESS GLOBAL ECONOMY GRAVITY MODEL GROWTH RATE HOST COUNTRIES HOST COUNTRY HOST ECONOMIES HOST-COUNTRY IMPORTS INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL INVESTMENT INTERNATIONAL TRADE INVESTING INVESTMENT FLOWS LABOR FORCE LATIN AMERICAN MACROECONOMIC VOLATILITY MANUFACTURING MANUFACTURING INDUSTRIES MANUFACTURING SECTOR MARKET EXCHANGE RATE MARKET SIZE MARKETING MONETARY FUND MULTINATIONAL ENTERPRISE MULTINATIONAL ENTERPRISES NATIONAL CURRENCY NATURAL RESOURCE NATURAL RESOURCES NET EXPORTS PATENTS POLITICAL INSTABILITY POLITICAL RISK POLITICAL STABILITY POSITIVE COEFFICIENT POSITIVE EFFECTS PRODUCTION PROCESSES PUBLIC FINANCE R&D REAL EXCHANGE RATE REAL GDP RESULT RESULTS ROBUSTNESS CHECK SEARCH SLOWDOWN STANDARD DEVIATION SUBSTITUTION EFFECT TAX TOTAL MARKET TRADE REFORMS TREATIES TRINIDAD AND TOBAGO VALUE ADDED VERTICAL INTEGRATION WAGES WEB WORLD DEVELOPMENT INDICATORS WTO |
| spellingShingle |
ABSOLUTE VALUE ACCOUNTING AGRICULTURE BENCHMARK BENCHMARK SPECIFICATION BILATERAL TRADE BILATERAL TRADE DATA CAPITAL STOCKS CENTRAL AMERICA CENTRAL AMERICAN CONSUMER PRICE INDEX CONTROL VARIABLES CURRENCY DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPMENT BANK ECONOMETRIC ANALYSES ECONOMETRIC MODELS ECONOMIC GROWTH EMERGING ECONOMIES EXCHANGE RATE EXPECTED VALUE EXPLANATORY VARIABLES EXPORTS FDI FEDERAL RESERVE FEDERAL RESERVE SYSTEM FINANCIAL SUPPORT FIXED EFFECT FIXED EFFECTS FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT FOREIGN INVESTORS FUNDAMENTAL DETERMINANTS GDP GDP PER CAPITA GLOBAL BUSINESS GLOBAL ECONOMY GRAVITY MODEL GROWTH RATE HOST COUNTRIES HOST COUNTRY HOST ECONOMIES HOST-COUNTRY IMPORTS INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL INVESTMENT INTERNATIONAL TRADE INVESTING INVESTMENT FLOWS LABOR FORCE LATIN AMERICAN MACROECONOMIC VOLATILITY MANUFACTURING MANUFACTURING INDUSTRIES MANUFACTURING SECTOR MARKET EXCHANGE RATE MARKET SIZE MARKETING MONETARY FUND MULTINATIONAL ENTERPRISE MULTINATIONAL ENTERPRISES NATIONAL CURRENCY NATURAL RESOURCE NATURAL RESOURCES NET EXPORTS PATENTS POLITICAL INSTABILITY POLITICAL RISK POLITICAL STABILITY POSITIVE COEFFICIENT POSITIVE EFFECTS PRODUCTION PROCESSES PUBLIC FINANCE R&D REAL EXCHANGE RATE REAL GDP RESULT RESULTS ROBUSTNESS CHECK SEARCH SLOWDOWN STANDARD DEVIATION SUBSTITUTION EFFECT TAX TOTAL MARKET TRADE REFORMS TREATIES TRINIDAD AND TOBAGO VALUE ADDED VERTICAL INTEGRATION WAGES WEB WORLD DEVELOPMENT INDICATORS WTO Cravino, Javier Lederman, Daniel Olarreaga, Marcelo Substitution between Foreign Capital in China, India, the Rest of the World, and Latin America : Much Ado about Nothing? |
| geographic_facet |
Latin America China India |
| relation |
Policy Research Working Paper; No. 4361 |
| description |
This paper explores the impact of the
emergence of China and India on foreign capital stocks in
other economies. Using bilateral data from 1990-2003 and
drawing from the knowledge-capital model of the
multinational enterprises to control for fundamental
determinants of foreign capital stocks across countries, the
evidence suggests that the impact of foreign capital in
China and India on other countries' foreign capital
stocks has been positive. This finding is robust to the use
of ordinary least squares, Poisson, and negative binomial
estimators; to the inclusion of time and country-pair fixed
effects; to the inclusion of natural-resource endowments;
and to the use of the sum of foreign capital stocks in Hong
Kong (China) and mainland China instead of using only the
latter's foreign capital stocks. There is surprisingly
weak evidence of substitution in manufacturing foreign
capital stocks away from Central America and Mexico in favor
of China, and from the Southern Cone countries to India, but
these findings are not robust to the use of alternative
estimation techniques. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Cravino, Javier Lederman, Daniel Olarreaga, Marcelo |
| author_facet |
Cravino, Javier Lederman, Daniel Olarreaga, Marcelo |
| author_sort |
Cravino, Javier |
| title |
Substitution between Foreign Capital in China, India, the Rest of the World, and Latin America : Much Ado about Nothing? |
| title_short |
Substitution between Foreign Capital in China, India, the Rest of the World, and Latin America : Much Ado about Nothing? |
| title_full |
Substitution between Foreign Capital in China, India, the Rest of the World, and Latin America : Much Ado about Nothing? |
| title_fullStr |
Substitution between Foreign Capital in China, India, the Rest of the World, and Latin America : Much Ado about Nothing? |
| title_full_unstemmed |
Substitution between Foreign Capital in China, India, the Rest of the World, and Latin America : Much Ado about Nothing? |
| title_sort |
substitution between foreign capital in china, india, the rest of the world, and latin america : much ado about nothing? |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2007/09/8339154/substitution-between-foreign-capital-china-india-rest-world-latin-america-much-ado-nothing-substitution-between-foreign-capital-china-india-rest-world-latin-america-much-ado-nothing http://hdl.handle.net/10986/7338 |
| _version_ |
1764402356383907840 |