Credit Conditions and Foreign Direct Investment During the Global Financial Crisis:

This paper investigates the effect that tight credit conditions had on outward foreign direct investment flows during the 2008-2010 global financial crisis. A difference-in-differences approach is used to isolate a "credit channel" impact of the global financial crisis on foreign direct in...

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Bibliographic Details
Main Authors: Desbordes, Rodolphe (Author), Wei, Shang-jin 1964- (Author)
Format: Electronic eBook
Language:English
Published: Washington, D.C The World Bank 2014
Online Access:Volltext
Summary:This paper investigates the effect that tight credit conditions had on outward foreign direct investment flows during the 2008-2010 global financial crisis. A difference-in-differences approach is used to isolate a "credit channel" impact of the global financial crisis on foreign direct investment. The global financial crisis had a stronger negative impact on the relative volume of outward foreign direct investment in financially vulnerable sectors in more financially developed countries, especially if these countries also experienced a banking crisis. These results suggest that lack of access to external finance can partly explain the drop in foreign direct investment during the global financial crisis
Physical Description:1 Online-Ressource (27 Seiten)

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