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Impact of Foreign Direct Investment on Developing Country Credit Markets
| Content Provider | Semantic Scholar |
|---|---|
| Author | Vora, Ankur |
| Copyright Year | 2001 |
| Abstract | This paper analyzes the impact of foreign direct investment on domestic ...nancial markets more speci...cally on the credit constraints of domestic ...rms. There is considerable ambiguity regarding the impact of FDI on credit constraints of its domestic competition. It has been argued that FDI has a negative impact by crowding out domestic ...rms or by reducing pro...tability via product market competition. On the other hand it has been argued that FDI brings in capital from the international market and thus supplants the capital stock available. This in turn lessens the credit constraints. In this paper, I try to verify empirically which of the above claims is true. For Morocco the results suggest that FDI does have a tightening impact on credit for the domestic competition inspite of supplanting the capital stock. The ¤I would like to thank Arindrajit Dube for his help in an earlier version of this paper. Thanks to Randy Kroszner, Larry Sjaastad, Assaf Razin and Maitreesh Ghatak for their advice and comments. Thanks to Ann Harrison for the Moroccon database. Thanks to Xavier Gine for all his help and participants of the Townsend Pizza Workshop for their comments on an earlier draft. All errors are my own. E-mail : acvora@midway.uchicago.edu |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://www.lacea.org/meeting2001/vora.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
