IDEAS home Printed from
   My bibliography  Save this article

Foreign Direct Investments During Financial Crises



    () (Academia de Studii Economice bucuresti, Relatii economice internationale)


The fundamental idea of International capital flows is that short-term flows can be easily reversed, while flows on a longer time horizon are more stable. Crises are associated with withdrawals of short-term capital flows and growth of the foreign direct investment flows. The current crisis has meant a major decline of international capital flows, also of the foreign direct investment. The analysis in this article tries to establish if and under which conditions foreign direct investments can bring greater stability during the crisis, comparing the evolution of foreign direct investments in the current crisis with their response in previous crises. We show that during previous crises foreign direct investments were stable, behaving differently from other types of capital. Yet, during the current crisis, foreign direct investments have proven to be not so stable and all the components declined, raising questions about the resumption of the positive trend. The stability of foreign direct investments in the past was given by the increase of mergers and acquisitions during the crisis, reflecting fire-sale FDI. This feature is not found in the current crisis as mergers and acquisitions were severe affected by the crises and recorded a major decline. The current paper is realized in the doctoral program entitled "PhD in economics at the standards of European knowledge- DoEsEc", scientific coordinator Prof. PhD Rodica Zaharia, institution The Academy of Economic Studies Bucharest, Faculty of International Business, period of research 2009-2012.

Suggested Citation

  • Vintila Denisia Mariana, 2011. "Foreign Direct Investments During Financial Crises," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 41-45, December.
  • Handle: RePEc:ora:journl:v:1:y:2011:i:2:p:41-45

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Kaminsky, Graciela L & Reinhart, Carmen M, 1998. "Financial Crises in Asia and Latin America: Then and Now," American Economic Review, American Economic Association, vol. 88(2), pages 444-448, May.
    2. Maggie Chen & Laura Alfaro, 2010. "Surviving the Global Financial Crisis: Foreign Direct Investment and Establishment Performance," Working Papers 2010-17, The George Washington University, Institute for International Economic Policy.
    3. Lauge Skovgaard Poulsen & Gary Clyde Hufbauer, 2011. "Foreign Direct Investment in Times of Crisis," Working Paper Series WP11-3, Peterson Institute for International Economics.
    4. Prema-chandra Athukorala, 2003. "FDI in Crisis and Recovery: Lessons from the 1997-98 Asian Crisis," Departmental Working Papers 2003-04, The Australian National University, Arndt-Corden Department of Economics.
    Full references (including those not matched with items on IDEAS)

    More about this item


    foreign direct investment; financial crisis; fire-sale FDI; international capital flows; Asian crisis;

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ora:journl:v:1:y:2011:i:2:p:41-45. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Catalin ZMOLE) or (Rebekah McClure). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.