DETERMINANTS AND IMPACT OF FINANCIAL SECTOR FDI TO EMERGING

Alicia Garcia Herrero and Daniel Navia ()

International Finance from University Library of Munich, Germany

Abstract: This paper reviews the theoretical literature explaining financial FDI, as well as the empirical results on the determinants of financial FDI and its potential effects for the home country. From this revision, we conclude that, at the present stage, the existing theoretical paradigms need to be adapted to explain the recent surge in international banks’ local operations in emerging countries financial sectors. Macroeconomic and risk diversification theories would seem particularly well- suited to explain this reality. The empirical literature on financial FDI has concentrated on bank-specific factors and much less so on macroeconomic determinants, particularly push factors where generally only general FDI literature is available. The survey draws on this literature in those cases where no specific results for financial FDI exist. Finally, the effects of financial FDI on the home country are virtually unknown. The literature on general FDI has focused on employment, trade and investment effects, yet the consequences on the profitability and systemic risk of home’s financial system remain a topic for debate.

JEL-codes: F3 F4 (search for similar items in EconPapers)
Date: 2004-03-02
New Economics Papers: this item is included in nep-ifn and nep-mfd
Note: Type of Document - pdf; prepared on WIN 2000; to print on hp;
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://econwpa.ub.uni-muenchen.de/econ-wp/if/papers/0403/0403001.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpif:0403001

Access Statistics for this paper

More papers in International Finance from University Library of Munich, Germany
Bibliographic data for series maintained by EconWPA ( this e-mail address is bad, please contact ).