Determinants of foreign direct investment outflows of selected oecd countries

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Introduction There has been considerable interest among researchers in recent years about the nature, causes and consequences of foreign direct investment (FDI) flows. This interest emanates partly from the rising prominence of Japan as the principal source of FDI outflows in the late 1980s; the enactment of the Single European Act leading to economic integration; and the opening up of new opportunities from the collapse of the socialist economies in Europe and Asia. While the earlier studies tried to evaluate the effectiveness of various incentive packages offered by host countries, including shifts and adjustments in the regulatory practices, some of the recent ones attempted to address the factors that prompt multinational corporations (MNCs) to expand their operations abroad. The latter analyzed FDI flows of specific countries such as Japan, Canada, and the US, into specific countries or regions, e.g., UK, US, and European Union (EU), the successor to the European Economic Community (EEC). However, not much has been done to determine an aggregate function for the outflows of FDIs from a group of countries that provide most of the flows.

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The Global Structure of Financial Markets: An Overview

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