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Financial-Sector FDI and Host Countries: New and Old Lessons

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Linda Goldberg

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Abstract

Many of the lessons from foreign direct investment (FDI) research on manufacturing and extractive resource industries are applicable to financial-sector FDI. This paper reviews the main findings and policy themes of FDI research, with a primary focus on the host country implications of FDI for emerging market economies. Evidence on technology transfers, productivity spillovers, wage effects, macroeconomic growth, and fiscal and tax concerns are emphasized. Throughout this review, I stress that parallel findings often arise independently in the separate research programs that focus on general and financial-sector FDI. I also emphasize that some important differences between the results of FDI into these sectors are apparent, especially with respect to their implications for local institution building and business cycles. These differences, more so than the similarities, should be the focus of concentrated research efforts.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10441.

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Date of creation: Apr 2004
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Handle: RePEc:nbr:nberwo:10441

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F3 - International Economics - - International Finance
F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Ricardo Correa, 2008. "Cross-border bank acquisitions: Is there a performance effect?," International Finance Discussion Papers 922, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  2. Guisan, Maria-Carmen & Aguayo, Eva, 2007. "Desarrollo Economico De America Latina En 2000-2005: Industria, Comercio Exterior E Inversion," Estudios Economicos de Desarrollo Internacional, Euro-American Association of Economic Development, vol. 7(1), pages 5-24. [Downloadable!]
  3. Frederic Mishkin, 2005. "Is Financial Globalization Beneficial?," NBER Working Papers 11891, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Kozo Kiyota & Barbara Peitsch & Robert M. Stern, 2007. "The Case for Financial Sector Liberalization in Ethiopia," Working Papers 565, Research Seminar in International Economics, University of Michigan. [Downloadable!]
    Other versions:
  5. Pozzolo, Alberto Franco, 2008. "Bank Cross-Border Merger and Acquisitions (Causes, consequences and recent trends)," Economics & Statistics Discussion Papers esdp08048, University of Molise, Dept. SEGeS. [Downloadable!]
    Other versions:
  6. Philip R. Lane, 2008. "EMU and Financial Integration," The Institute for International Integration Studies Discussion Paper Series iiisdp272, IIIS. [Downloadable!]
  7. Lehner, Maria & Schnitzer, Monika, 2006. "Entry of Foreign Banks and their Impact on Host Countries," Discussion Papers in Economics 1208, University of Munich, Department of Economics. [Downloadable!]
    Other versions:
  8. Tao Li & Xingqiang He & Kaiguo Zhou, 2009. "Resident’s comparative assessment on domestic versus foreign financial institutions: Evidence from nine cities in China," Frontiers of Economics in China, Springer, vol. 4(1), pages 76-96, March. [Downloadable!] (restricted)
  9. Claudia M. Buch & Gayle L. DeLong, 2008. "Banking Globalization: International Consolidation and Mergers in Banking," IAW Discussion Papers 38, Institut für Angewandte Wirtschaftsforschung (IAW). [Downloadable!]
  10. Nicola Cetorelli & Linda S. Goldberg, 2009. "Globalized banks: lending to emerging markets in the crisis," Staff Reports 377, Federal Reserve Bank of New York. [Downloadable!]
  11. Mikel Larreina, 2008. "Financial centres in peripheral regions: the effect of the financial services industry on regional economy - the case of the Scottish Financial cluster," CRIEFF Discussion Papers 0805, Centre for Research into Industry, Enterprise, Finance and the Firm. [Downloadable!]
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