Foreign Direct Investments During Financial Crises
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.
Volume (Year): 1 (2011)
Issue (Month): 2 (December)
|Contact details of provider:|| Postal: |
Fax: 004 0259 408409
Web page: http://anale.steconomiceuoradea.ro/
More information through EDIRC
References listed on IDEAS
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.:
- Reinhart, Carmen & Kaminsky, Graciela, 1998.
"Financial crises in Asia and Latin America: Then and now,"
13877, University Library of Munich, Germany.
- 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 444-48, May.
- 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.
- Maggie Chen & Laura Alfaro, 2010.
"Surviving the Global Financial Crisis: Foreign Direct Investment and Establishment Performance,"
2010-17, The George Washington University, Institute for International Economic Policy.
- Laura Alfaro & Maggie Chen, 2010. "Surviving the Global Financial Crisis: Foreign Direct Investment and Establishment Performance," Harvard Business School Working Papers 10-110, Harvard Business School.
- Lauge Skovgaard Poulsen & Gary Clyde Hufbauer, 2011. "Foreign Direct Investment in Times of Crisis," Working Paper Series WP11-3, Peterson Institute for International Economics.
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)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.