Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/149502
Authors: 
Poelhekke, Steven
Year of Publication: 
2016
Series/Report no.: 
Tinbergen Institute Discussion Paper 16-098/VIII
Abstract: 
This chapter provides a broad overview of the upward trends in financial globalization and foreign direct investment and asks whether and how financial globalization is linked with the foreign direct investment decisions of non-financial multinational enterprises. Several potential links and their empirical support in the recent literature are discussed: the elements of foreign direct investment that require (global) financial services; the role of trade credit; and the question whether banks follow their customers abroad. Finally, the effect of the recent financial crisis is discussed. It finds that financial globalization provides a reduction in broadly defined transaction costs which can boost both trade and foreign direct investment, at the costs of more exposure of the real economy to financial shocks.
Subjects: 
foreign direct investment
financial globalization
banks
JEL: 
F23
F36
F43
O40
Document Type: 
Working Paper

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