V Foreign Direct Investment
Author:
International Monetary Fund
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Language:
English
Print Publication Date:
01 Jan 1995
Keywords:
WEFS; investor confidence; foreign direct investment flow; secondary market; developing country securities; securities exchange; foreign direct investment inflow; flows to developing countries; inflow to Latin America; inflows of foreign direct investment; capital account transactions; Foreign direct investment; Capital flows; Wages; Current account; Balance of payments statistics; Asia and Pacific; Central and Eastern Europe; Africa; Global

Abstract

A long with the rise in portfolio capital inflows, developing countries have experienced a surge in foreign direct investment inflows during the 1990s. Like portfolio capital, these inflows have gone to a relatively small number of countries in Latin America and Asia. Their sharp rise is in part explained by factors that are likely to exert an influence over a limited period of time, such as the privatization of government assets or the rebalancing of asset holdings in response to economic reforms in developing countries. Although foreign direct investment is often perceived as a relatively stable source of financing, a review of experience in the 1980s of a sample of highly indebted developing countries suggests a more cautious view. When balance of payments difficulties are encountered, the net impact of all transactions associated with foreign direct investment (including both current and capital account transactions) may serve to exacerbate external imbalances.

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Cover Private Market Financing
Private Market Financing
ISBN:
9781451940152
ISSN:
0258-7440
Publication Date:
01 Jan 1995
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781451940152.083
Pages:
91

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