Controlled Openness and Foreign Direct Investment
AbstractThe paper investigates why a developing country may adopt a partial reform. A country is considered where the ruling elite (referred to as state capital) prevents the entry of foreign capital, and taxes the private sector before reform. A higher productivity of foreign capital always increases the attractiveness of a partial reform under which state capital can control the inflow of foreign capital, but can reduce the attractiveness of a full reform under which the entry of foreign capital is unregulated. Hence, state capital's control over foreign capital may be a necessary condition for the reform to take place at all. Copyright 1998 by Blackwell Publishing Ltd
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Review of Development Economics.
Volume (Year): 2 (1998)
Issue (Month): 1 (February)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1363-6669
Other versions of this item:
- F15 - International Economics - - Trade - - - Economic Integration
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
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