Foreign Direct Investment and Debt Financing in Emerging Economies
研究发现新兴经济体的外债总是顺周期，而外国直接投资只在正常时期顺周期；通过构建模型，用金融冲击解释这一模式，并指出金融危机时外资流入增加。
Abstract The rich dynamics of capital flows is an important characteristic of business cycles in emerging market economies. In the data external debt is always procyclical, while FDI is procyclical only in normal times. We provide a microfounded rationale for this pattern by linking financial shocks to capital flows. For this purpose, we build a small open economy model in which firms are subject to borrowing constraints, and are either owned domestically or by foreign investors who purchase firms through FDI. During a financial crisis, the valuation gap per unit net worth between foreign and domestic investors widens, which triggers more FDI inflow. Our model produces business cycle moments consistent with empirical observations.