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Three essays on financial crises, foreign direct investment and cross-national coordination

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Item Summary

Title: Three essays on financial crises, foreign direct investment and cross-national coordination
Authors: Bogach, Olga Vladislavovna
Keywords: financial crises
foreign direct investment
cross-national coordination
Issue Date: Aug 2012
Publisher: [Honolulu] : [University of Hawaii at Manoa], [August 2012]
Abstract: The first two chapters of this dissertation examine the evolution of foreign direct investment (FDI) inflows to developing countries around financial crises. In the first chapter, I empirically and thoroughly examine the Fire-Sale FDI hypothesis and describe the pattern of FDI inflows surrounding financial crises. I add a more granular detail about the types of crises and their potentially differential effects on FDI. Moreover, I distinguish between Mergers and Acquisitions (M&A) and Greenfield investment, as well as between different motivations for FDI--horizontal and vertical. The results indicate that financial crises have a strong negative effect on inward FDI in developing countries. Crises are also shown to reduce the value of horizontal and vertical FDI. I do not find empirical evidence of Fire-Sale FDI. On the contrary, financial crises are shown to affect FDI flows and M&A activity negatively.
In the second chapter, I focus my analysis of FDI on the members of the Association of South East Asian Nations (ASEAN). I analyze historical data on ASEAN inward FDI in the context of the Asian financial crisis (AFC) and the 2008 economic downturn and present new data on ASEAN FDI cycles following the 1997 crisis relative to historical crises incidences. Empirically examining the effects of the AFC on ASEAN, I compare them to the historical averages for the Asian region as well a broad sample of forty developing countries. Distinguishing between the different types of crises and FDI, I find that AFC had a negative and relatively large effect on ASEAN FDI, as compared with historical averages.
Finally, the third chapter uses an experimental approach to study whether nationality serves as a coordination device in a cross-national economic experiment. The results show that nationality serves as a coordination device if common nationality is the only piece of information available to the subjects. However, providing participants with additional information about their partner diminishes this effect. I also find that subjects are likely to coordinate on the Pareto-dominant equilibrium at about the same rate if the partner has a different nationality than if nationality is unknown.
Description: Ph.D. University of Hawaii at Manoa 2012.
Includes bibliographical references.
Appears in Collections:Ph.D. - Economics

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