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Foreign Direct Investors in Three Financial Crises


  • Robert E. Lipsey


In each of three financial and exchange rate crises, Latin America in 1982, Mexico in 1994, and East Asia in 1997, direct investment inflows into the affected countries have behaved differently from other forms of investment, and U.S. manufacturing affiliates have behaved differently from other firms in their host countries. Inflows of direct investment into the crisis countries have been much more stable than inflows of portfolio or other forms of investment. U.S. manufacturing affiliates have switched their sales from host-country to export markets to a greater extent and for a longer period than other host-country firms. They have switched markets partly by more sharply curtailing their local sales, at least in terms of U.S. dollar values. In the cases where we have the data, U.S. affiliates have also tended to sustain their capital expenditure levels during the crises.

Suggested Citation

  • Robert E. Lipsey, 2001. "Foreign Direct Investors in Three Financial Crises," NBER Working Papers 8084, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:8084
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    References listed on IDEAS

    1. Robert E. Lipsey, 1995. "Trade and Production Networks of U.S. MNCs and Exports by Their Asian Affiliates," NBER Working Papers 5255, National Bureau of Economic Research, Inc.
    2. Fukuda, Shin-ichi & Hoshi, Takeo & Ito, Takatoshi & Rose, Andrew, 2006. "International Finance," Journal of the Japanese and International Economies, Elsevier, vol. 20(4), pages 455-458, December.
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    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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