Will FDI be Resilient in this Crisis?

Although foreign direct investment (FDI) flows have tended to remain resilient during previous crises, they may not behave in a similar fashion during the current crisis. Why? In past crises, the stability of FDI flows was significantly associated with an increase in mergers and acquisitions (M&A), reflecting 'fire-sale FDI'. In the present crisis, by contrast, M&A activity decreased significantly in the last quarter of 2008, and this trend may continue as long as the global crisis constrain the purchasing ability of foreign (acquiring) firms. These developments further illustrate that the nature of the current crisis differs considerably from previous ones, suggesting that certain key lessons from past crisis lessons might not apply in the current context.

Bibliographic Details

Main Authors:	Calderon, Cesar, Didier, Tatiana
Language:	English
Published:	World Bank, Washington, DC 2009-01
Subjects:	ACCOUNTING, BANK LENDING, BUSINESS CYCLES, CAPITAL FLOWS, CAPITAL MARKETS, DEVELOPING COUNTRIES, DOMESTIC FIRMS, EMERGING ECONOMIES, EMERGING MARKET, EMERGING MARKET COUNTRIES, EMERGING MARKET ECONOMIES, EMERGING MARKETS, EQUITY FLOWS, FDI, FINANCIAL ACCOUNT, FINANCIAL CRISES, FINANCIAL CRISIS, FINANCIAL FLOWS, FINANCIAL RESOURCES, FOREIGN ACQUISITIONS, FOREIGN BUYERS, FOREIGN DIRECT INVESTMENT, FOREIGN DIRECT INVESTMENTS, FOREIGN INVESTORS, FOREIGN OWNERSHIP, INTERNATIONAL FINANCE, LIQUIDITY, LIQUIDITY CONSTRAINTS, LIQUIDITY CRISES, LIQUIDITY CRISIS, MERGER, MERGERS, NET CAPITAL, NET CAPITAL FLOWS, NET DEBT, NET EQUITY, NET EQUITY FLOWS, NET FLOWS, NET PORTFOLIO, NET PORTFOLIO EQUITY, NET PRIVATE, NET PRIVATE DEBT, PORTFOLIO, PORTFOLIO EQUITY, PRIVATE CAPITAL, PRIVATE CAPITAL FLOWS, PRIVATE DEBT, PRIVATE DEBT FLOWS, TRADE CREDIT, TRANSPARENCY, WORLD CAPITAL MARKETS,
Online Access:	http://documents.worldbank.org/curated/en/2009/01/11954152/fdi-resilient-crisis https://hdl.handle.net/10986/11000
Tags:	Add Tag No Tags, Be the first to tag this record!