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Credit Conditions and Foreign Direct Investment During the Global Financial Crisis / Desbordes, Rodolphe
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Desbordes, Rodolphe
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Access to Finance.
- Banking Crisis.
- Bankruptcy and Resolution of Financial Distress.
- Credit Constraints.
- Debt Markets.
- Economic Theory & Research.
- Emerging Markets.
- Finance and Financial Sector Development.
- Financial Development.
- Foreign Direct Investment.
- Global Financial Crisis.
- Macroeconomics and Economic Growth.
- Private Sector Development.
- Local Subjects:
- Access to Finance.
- Banking Crisis.
- Bankruptcy and Resolution of Financial Distress.
- Credit Constraints.
- Debt Markets.
- Economic Theory & Research.
- Emerging Markets.
- Finance and Financial Sector Development.
- Financial Development.
- Foreign Direct Investment.
- Global Financial Crisis.
- Macroeconomics and Economic Growth.
- Private Sector Development.
- Physical Description:
- 1 online resource (27 pages)
- Place of Publication:
- Washington, D.C., The World Bank, 2014
- System Details:
- data file
- Summary:
- This paper investigates the effect that tight credit conditions had on outward foreign direct investment flows during the 2008-2010 global financial crisis. A difference-in-differences approach is used to isolate a "credit channel" impact of the global financial crisis on foreign direct investment. The global financial crisis had a stronger negative impact on the relative volume of outward foreign direct investment in financially vulnerable sectors in more financially developed countries, especially if these countries also experienced a banking crisis. These results suggest that lack of access to external finance can partly explain the drop in foreign direct investment during the global financial crisis.
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