Foreign Direct Investors in Three Financial Crises

51 Pages Posted: 12 Jan 2001 Last revised: 20 Oct 2010

See all articles by Robert E. Lipsey

Robert E. Lipsey

National Bureau of Economic Research (NBER) at New York (Deceased)

Date Written: January 2001

Abstract

In each of three financial and exchange rate crises, Latin America in 1982, Mexico in 1994, and East Asia in 1997, direct investment inflows into the affected countries have behaved differently from other forms of investment, and U.S. manufacturing affiliates have behaved differently from other firms in their host countries. Inflows of direct investment into the crisis countries have been much more stable than inflows of portfolio or other forms of investment. U.S. manufacturing affiliates have switched their sales from host-country to export markets to a greater extent and for a longer period than other host-country firms. They have switched markets partly by more sharply curtailing their local sales, at least in terms of U.S. dollar values. In the cases where we have the data, U.S. affiliates have also tended to sustain their capital expenditure levels during the crises.

Suggested Citation

Lipsey, Robert E., Foreign Direct Investors in Three Financial Crises (January 2001). NBER Working Paper No. w8084. Available at SSRN: https://ssrn.com/abstract=256092

Robert E. Lipsey (Contact Author)

National Bureau of Economic Research (NBER) at New York (Deceased)

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