IDEAS home Printed from https://ideas.repec.org/h/nbr/nberch/9801.html
   My bibliography  Save this book chapter

The Role of Foreign Direct Investment in International Capital Flows

In: International Capital Flows

Author

Listed:
  • Robert E. Lipsey
  • Robert C. Feenstra
  • Carl H. Hahn
  • George N. Hatsopoulos

Abstract

Direct investment has accounted for about a quarter of total international capital outflows in the 1990s and appears to have grown, relative to other forms of international investment, since the 1970s. The United States was by far the major source of direct investment outflows in the early 1970s, but Europe caught up to the United States in the 1980s and Japan almost did, before fading in the 1990s. The United States shifted from being the largest net supplier of direct investment to absorbing much of the world's supply, especially in the late 1980s, and then reverted to its earlier net supplier role. Direct Investment flows have been the least volatile source of international investment for most countries, the chief exception being the United States, which has flipped back and forth from dominant net supplier to dominant net recipient, and back to dominant net supplier. Particularly for developing countries, direct investment has been the most dependable source of foreign investment.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Robert E. Lipsey & Robert C. Feenstra & Carl H. Hahn & George N. Hatsopoulos, 1999. "The Role of Foreign Direct Investment in International Capital Flows," NBER Chapters, in: International Capital Flows, pages 307-362, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:9801
    as

    Download full text from publisher

    File URL: http://www.nber.org/chapters/c9801.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Robert E. Lipsey, 1994. "Foreign-Owned Firms and U.S. Wages," NBER Working Papers 4927, National Bureau of Economic Research, Inc.
    2. Dani Rodrik, 1998. "Has Globalization Gone Too Far?," Challenge, Taylor & Francis Journals, vol. 41(2), pages 81-94, March.
    3. Goodman, John B. & Spar, Debora & Yoffie, David B., 1996. "Foreign direct investment and the demand for protection in the United States," International Organization, Cambridge University Press, vol. 50(4), pages 565-591, October.
    4. Bruce A. Blonigen, 2019. "Firm-Specific Assets and the Link Between Exchange Rates and Foreign Direct Investment," World Scientific Book Chapters, in: Foreign Direct Investment, chapter 3, pages 89-120, World Scientific Publishing Co. Pte. Ltd..
    5. Brecher, Richard A. & Diaz Alejandro, Carlos F., 1977. "Tariffs, foreign capital and immiserizing growth," Journal of International Economics, Elsevier, vol. 7(4), pages 317-322, November.
    6. Kenneth A. Froot & Jeremy C. Stein, 1991. "Exchange Rates and Foreign Direct Investment: An Imperfect Capital Markets Approach," The Quarterly Journal of Economics, Oxford University Press, vol. 106(4), pages 1191-1217.
    7. Edward M. Graham, 1996. "Global Corporations and National Governments," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 54, December.
    8. D.N. Saxena, 1989. "Foreign Direct Investment," Foreign Trade Review, , vol. 24(1), pages 76-97, April.
    9. Bhagwati, Jagdish N & Dinopoulos, Elias & Wong, Kar-yiu, 1992. "Quid Pro Quo Foreign Investment," American Economic Review, American Economic Association, vol. 82(2), pages 186-190, May.
    10. Elias Dinopoulos, 1992. "Quid Pro Quo Foreign Investment And Vers: A Nash Bargaining Approach," Economics and Politics, Wiley Blackwell, vol. 4(1), pages 43-60, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Robert C. Feenstra, "undated". "Facts And Fallacies About Foreign Direct Investment," Department of Economics 98-04, California Davis - Department of Economics.
    2. Fernando Mistura & Caroline Roulet, 2019. "The determinants of Foreign Direct Investment: Do statutory restrictions matter?," OECD Working Papers on International Investment 2019/01, OECD Publishing.
    3. Bruce A. Blonigen & Robert C. Feenstra, 1997. "Protectionist Threats and Foreign Direct Investment," NBER Chapters, in: The Effects of U.S. Trade Protection and Promotion Policies, pages 55-80, National Bureau of Economic Research, Inc.
    4. Aizenman, Joshua, 2003. "Volatility, employment and the patterns of FDI in emerging markets," Journal of Development Economics, Elsevier, vol. 72(2), pages 585-601, December.
    5. di Giovanni, Julian, 2005. "What drives capital flows? The case of cross-border M&A activity and financial deepening," Journal of International Economics, Elsevier, vol. 65(1), pages 127-149, January.
    6. Bolling, H. Christine, 1992. "The European Community Presence in U.S. Agriculture," Foreign Agricultural Economic Report (FAER) 147998, United States Department of Agriculture, Economic Research Service.
    7. Laura Alfaro & Andrew Charlton, 2007. "Growth and the Quality of Foreign Direct Investment: Is All FDI Equal?," CEP Discussion Papers dp0830, Centre for Economic Performance, LSE.
    8. Rajesh Chakrabarti & Barry Scholnick, 2002. "Exchange rate expectations and foreign direct investment flows," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 138(1), pages 1-21, March.
    9. Shi, Jiao, 2019. "Vertical FDI and exchange rates over the business cycle: The welfare implications of openness to FDI," Journal of Development Economics, Elsevier, vol. 138(C), pages 274-293.
    10. Rolf J. Langhammer, 2010. "Unordnung in der internationalen Handelsordnung: Befunde, Gründe, Auswirkungen und Therapien," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 11(1), pages 75-98, February.
    11. Lee, Bong-Soo & Min, Byung S., 2011. "Exchange rates and FDI strategies of multinational enterprises," Pacific-Basin Finance Journal, Elsevier, vol. 19(5), pages 586-603, November.
    12. Polk, Andreas & Schmutzler, Armin & Müller, Adrian, 2014. "Lobbying and the power of multinational firms," European Journal of Political Economy, Elsevier, vol. 36(C), pages 209-227.
    13. Miaojie Yu, 2020. "China-US Trade War and Trade Talk," Springer Books, Springer, number 978-981-15-3785-1, June.
    14. Cushman, David O. & De Vita, Glauco, 2017. "Exchange rate regimes and FDI in developing countries: A propensity score matching approach," Journal of International Money and Finance, Elsevier, vol. 77(C), pages 143-163.
    15. Mark E. Doms & J . Bradford Jensen, 1998. "Comparing Wages, Skills, and Productivity between Domestically and Foreign-Owned Manufacturing Establishments in the United States," NBER Chapters, in: Geography and Ownership as Bases for Economic Accounting, pages 235-258, National Bureau of Economic Research, Inc.
    16. Etzo, Ivan & Takaoka, Sumiko, 2016. "The impact of migrants on the cross-border M&A: Some evidence for Japan," MPRA Paper 71558, University Library of Munich, Germany.
    17. Laixun Zhao & Yuqing Xing, 2003. "Currency Devaluation and Global Outsourcing," Working Papers EMS_2003_04, Research Institute, International University of Japan.
    18. Ronald B. Davies & Rodolphe Desbordes & Anna Ray, 2015. "Greenfield versus Merger & Acquisition FDI: Same Wine, Different Bottles?," Working Papers 201503, School of Economics, University College Dublin.
    19. Waldkirch Andreas & Tekin-Koru Ayça, 2010. "North American Integration and Canadian Foreign Direct Investment," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-40, August.
    20. J. Bradford Jensen & Dennis P. Quinn & Stephen Weymouth, 2014. "The Influences Of Foreign Direct Investments, Intrafirm Trading, And Currency Undervaluation On U.S. Firm Trade Disputes," Working Papers 14-04, Center for Economic Studies, U.S. Census Bureau.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    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:nbr:nberch:9801. 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: . General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    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.