Finance and Investment in Globalization

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Finance and Investment in Globalization

in The Journal of World Investment & Trade


United Nations Conference on Trade and l7cvclopmcnt, World Investment Report 2000, New York and Geneva, 2000. 2 United Nations, Mx/nN<7f/oNf!/ Corpnratioru in i17orld DCI'dop"'£'I1t, United Nations, New York, 1973, p. 23. A. Phatak, International Dinrensinns 4 Mal/agc"'cl/t, Pws-Kent 1'ublishing C:ompany, Boston, 1989. 1 Alexandrr J. Yeats,_liist /;βn' big is Global Production Sliariii.z? World Bank Rezearch Paper No. 1871, World Bank. Washington, D.C., Jatru�ry 1998.

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19 Chris Freenun, A Inuti Lalld;llgβ1r the "Neu1 Bconomy"? 11!1;>r111111;OIl TCd11l0logy and the United States National System of Innovation, Structural Change and Economic Dynalllies, Vol. 12, 2001, pp. 115-139. 2" Nigel CT. Hsieh, Alltsong Lill, and 1'cggy E. Swanson, Global Money Market Interrelationchips, International Review of Economics and Finance, Vol. 8, 1999, pp. 71-85. 21 Stcfanie Kleimeier and Harald Sander, Rcgionalisatitm i,erstis Globalization in Ellropeall Fiiiaticial Market Integratioll: Hvidence from Co-integration Analyses, journal ofBanking and Finance, Vol. 24, 2000, pp. 1005-1043.

22 Hiroshi Kosaka, japl111CSC Mmwgcrial Behavior il1 Str(iti"Zic Planning Case Analysis il1 Global Business COlltcxts, Journal ofl3usiness Research, Vol. 55, 2001, pp. 1-6. 23 D. Fclix, Asia and tlre Crisis off Financial Globalization, in D. Baker, G. Npstein, and R. Pollen (eds.), Globalization and Protressine 6rononrir Polidcs, Cambridge University Press, Cambridge, U.K., 1998. -^ J. Crotty, G. Epstein, and 1'. Kelly. ;'vIllltiIWioll,,1 CorporatiollS in dre Nrnlibcral Retinre, in Baker i-t al.. ibid.

21 T. Itagaki, The «Multinational enterprise under the Tlrreat oj llestriction nn Profil Repatriation 111/(/ 1-,xcli(jkWe Corrtrols, Journal of I)rvelopment Ecoiioiiiics, Vol. 31, No. 2, 1989, pp. 369-377; K. Judd, 1'rojectinn Methods for Soll'illg Aggregate Growth :Hodd,', JOl1rnalof Economie Thcory, Vol. 58, No. 2, 1992, pp. 410-452. 21, L. Bartolini and A. Drazen, 1,ib(>r�iliz,itioii as a Signal, American Economic Review, Vol. 87, No. 1, 1997, pp. 138-154; idell1, Wien Li6eral 1Jolicii-s Reflect Lrternal SI/(1Cks, 11Ihl/t d" we L"IIm' Journal of International Economics. Vol. 42. No. 3--4. 1997, pp. 249-273. 27 Lars Oaelheim, Trond Randoy, and Arthur Stonrhill, On the Treatll1('t1t of Fillall(,,-Spcdji, Faflors within the Ou Parad(�II1, International Business Review, Vol. 10, 2001, pp. 381-398; T. Pedcmeii and R. Yrtenen, L,.£1)IaiiiitlZ gradually iiicr(,iisiiiz Rcsollnc Conurritrnent to a Forc(SZll Aldrkt,t. Intcrnational13usiness Review, Vol. 7, No. 5, 1998, pp. 483-501.

28 J. Leimen, Integrating Financial Markets in the European Union, Edward Elgar, Cheltenham, U.K., 1998; G.C. Zimmerman, Irnplenu·rrtin,q tlte Single Banking Market in Europe, Fcdcral Reserve Bank of San Francisco Economic Review. Vol. 3, 1995, pp. 35-51. 1. '-'' R. Ramaswany and T. Stock, Tlre real Effects oj'Mi)iietary Policy in the European Union: 111/(/t are the Di[/cr1'l1(csl In4F Working Paper WI'/97/160, International Monetary Fund, Washington, D.C., 1997. "' J.H. Dunning, The Fdeclic Paradigm ac an Envelope firr Economic and Business '!7"wies of MNE Artivity, International Business Review, Vol. 9, 2000, pp. 163-190; J.H. Dunning and J.R. I)ilyard, 7'OM��.t a General Parodien of Foreign Dirert and Foreign Portfolio Investment, Transnational Corporations, Vol. 8, No. 1, April 1999, pp. 1-52. 3� G. Stevens, Gxrhange Rate and Foreign Direct Investment, Journal of Policy Modcling, Vol. 20, No. 3, 1998, pp. 393-403; M. Usecm, Corporate Leadership in a Clobalizillg Eqllity Market, Academy of Management Executive, Vol. 12, No. 4, 1998, pp. 43-59. '= Colin Mayer, Fi1UlI1(inJ� the New Econ01ny: Finandal 11lstitllfiolls and Corporate C01ICY1Wll(C, Information Economics and Policy, Vol. 14, 2002, pp. 311-326, at p. 31 1.

3.1 F. Moshirian, Pinaurial Ghallenges in the new Millcnnium, Journal of Multinational Financial Management, Vol. 10, 2000, pp. 229-236; idem, Financial Systems in the new Millennium, Journal of Multinational Financial Management, Vol. 11, 2001, pp. 315-320.

34 Geczy, Minton, and Schrand, supra, footnotc 15, pp. 1323-1354. 15 Hyun-Han Shin and Luc Socncn, Exposnre to Currency Risk by CLS. Multinationals Corporations, Journal of Multinational Financial Management. Vol. 9, 1999, pp. 195-207, at p. 206. 3� Kai A. Konrad and Kjell Erik 1_ommerud, Foreign Direct Investment , Intra-Firtn Trade and Ownership Stnmnre, European Economic Review, Vol. 45, 2001, pp. 475-494; Richard Portes, Helene Rey, and Yonghyup Oh, Information and Capital Flows: 'Die Determinants of Transactions in Financial Assets, European Economic Revirw, Vol. 45, 2001, pp. 783-796.

'� G.W. Kolodko, Front Outprt Collapse to Sustairrabfe Crowth in Transition Eamorvic_�: The Fisc(11 lrnpliratinrrs, International Monetary Fund, Washington, 17.C., 1992. 38 Paula D. Harvcston, Ben L. Kedia, and John D. Francis, M.vts' oij Foreign Operations arrd PrrJörmanre: A Study oj'MNβjrom the "Triad" R�Ziotis, Intcrnational Business Review, Vol. 8, 1999, pp. 293-307, at p. 305.

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43 Frank J. Garcia, 1-Lunarrizinq the Fiuancial "4.r(hit('(llIrl' of Globalization: A Tribute to ,he Work of Cynthia Lichtenstein, 25 B.C. Int & Coiiip. L. Rev. 203, 2002, at p. 203. 44 M. Brookc and H. Rcmmers, 17e Stral��)' of tlre MII/lill"tioll,,1 Enterprise, Pitman, London, 1978; Laixun Zhao, llnionizatinn, H')'hm/ Mrrrkets, �iiid the Outsonrcing o/'MHh�Mh'OMah.Journa) of International Fconomics, Vol. 55, 2001, pp. 1 87-202;J.P,. Markuscn, 77m tiourtdaries of Multinational Ellterprises aiid the Tlieory of International Trade, Journal of Economic Perspectivc, Vol. 9, 1995, pp. 1 G9-189. 45 H. Wagner, Imylicatiovs of ' Globalization for Monetary Policy, IMF Working Papcr WP/0 1 /l 84, Intcrnational Monctary Fund, Washington, D.C., 2001.

11, Kanishka Jayasl1riya. Globi7liz(iti(,ii, Lml and the Tralld�mllatioll t!f Stwcre(1!llty: The Emergence of Cjtobal Regulator)' 6 6 Ind. J. Global Legal Stud. 425, 1999, at p. 425: arguing that sovereignty is bring transformed sincc the concept of it as "exclusive territorial jurisdiction-given the shorthand term 'WcstphaliJI1' ... uo longer tlicorcticilly or ernpirieally scrviccablc in then face of thc intcrnationahzation of cconomic and social activity". Jack Goldslllith. Sonereltnty, hrternntinnnl Relntinns %7rrory and bltenhlf;olw/ Lw': SOl'crl":�l1ty: O�f!allizcd Hypocrisy, 52 Stan. L. Rcv. 959, 2000, at p. 959: noting convcntional undrntanding that sovereiglity in thc sensc ofa nation's sole and conclusivc power within its terriu>ry "appcars to have diminishcd sil,'ttificantly in thc past half Century as a result of economic globalization, transportation and C0111111Unications advances, thc rise of nongovermnental organizations (N<:os), and the spread of international human rights law". Kal Raustiala, Sovereignty and Multilateralem, 1 Chi. J. Int'l L. 401, 2000, at pp. 418-419: "We are increasingly choosing to regulate at the international level ... Sovereignty traditionally conceived will necrssarily be compromised ..." ;� G. Zekos, Itrtervet or Electrotiic Terhnalyy: A Thrent to State Sovereignty, JIIT, 1999, availablc at: «http://www.)aw.war\ Viem jnnn Firlrl: S""1e Obscnmtions on the �i'<7 of International C"""l1ercial Law Rf'/fnM ElT"rls ,11' the Rule I�it4" 6 Ind. J. Global Legal Stud. 497, 1999.

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51 See the Website of thc Organisation for Economic Co-opcration and Devclopment at: «http://�. .'2 International Monetary Fund, World Economic Oullook, IMF, Washington, D.C., Autumn 2001. 51 International Financial Institutions Advisory Commission, 11'tat: (Meltzer) Commission Report, March 2000, available at: L3onds Can Free Asia's Kconomy, Wall Strcet Journal, 22 July 1998, p. A14; UNCIAD, [World hll'estll1ellt Report. United Nations, New York and Gcneva. 1999, 2000, and 2001, available at: Anne Krucgcr, lnternational FitiancialArciiitectiirejZ)r2002: A new Approach to 1)(,bi Restmcturing, speech at the National Econnmists' Club Annual Meniben' Dinner, America Entcrprise Institute, Washington, D.G.. 26 November 2001.

51, OECD,DevelopmentC:n-nlreration 2000Reporl, Thc DACJourna). OF.C1), Paris, 2001; OECD Steering Group on Corporatc Govcrnancc, The Misuse oj Coporate Vehicles for Illicit Purposes, OECD, Paris, 2001, available at: rFostering Implemeutatian of International Standards to Strmgthm Financial Systems, Bis Quarterly Rcvicw, February 2001, availablc at: <Reporr ofthe Managing Dirertor to the International Monetary and Financial Committee: The Flllld 's Crisis 1>rl'l'mt"'1I Initiatives, November 2001, available at: « 1401.pdt�. ''' Robert Mundell, A Reconsideration of the T!f4'f�'� CJft�Hf�. spccch delivered at Europa Lectures, Brüssels, 27 March 2001. See also M. Mussa, P. Masson, A.Swoboda, E. Jadrcsic, T. Mauro, and A. Berg, EXfllat(�1' Rate Regimes in an 7�rfTf�)N�/y Integrated World Economy, International Monetary Fund, Washington, D.C., August 2001. 611 Kcnncth Rogoff, 1111Y Not a Glnbal CllrrCJIcy? Aiiicriciii Economic Review, Papers atid 1'rocccdinl,n, Vol. 91, No. 2, 2001, p. 244; idein, Institutions jor Redllcillg Global Pinanrial Instability, Journal of Ecouomic Pcrspectives, Vol. 13, Fall 1999, pp. 21-42. See also NliEK Working Papcr 7265, July 1999, available at: «». Maurice Obstfeld and Kenneth Rogoff, Do We Really Need a New JlltCYllatiOllil1 Manetary Compart, Nun, Working Paper 7864, National Bureau of Economic Research, Washington, D.C., 2000. (,� C. Fred Bergstcn and IZant1a11 Hcnning, Global Economic Leadership and the Group of 8e1'01, Institute for International Economics, Washington, D.C., 1996. N. McCulloch, A. Wintcrs, and X. Cirera, 'lYade Libera/isatiOlI alld Povt,rty: A Hm"Jbook, Center for Economic and Policy Rescarch, London, 2001; M. Lundberg and L. Squire, The Si""d/alleoIl5 Gvolutinrr o%Gromth and Inequality, World Bank, Washington, D.C., 1999.

w David Dollar and Aart Kraay, Trade, Growtli and Pouerry, Developlllcllt Rcscarch Group, The World Bank, Washington, D.C., March 2001, available at: «]ar.htm)'; Rudiger Dornbusch, A Primer on Fmergill,� Marker Crises, NBFR Working Paper 8326, National Burcau ofEconolllic Research, Washington, I7.C., January 2001, available at: «httli://». 65 William R. Cline, Tlie Role rf the Private Sector in Resolving Fillallcial Crises in Emerging Markets, National Bureau of Economic Research, Washington, D.C., September 2000, available at: « woodstock00/sector.pdf». 16 Claudia Buch and Christian pierdzioch, 'l7re Crounlr and W lalrility of International 1-loti�s: Ri,coticiiiii,� the Evidence, in H. Siebert (ed.), l'he World 's neu1 Financial LanA.anpe: Cluillenges for Econorrrir Policy)" Springer-Verlag, Berlin, 2001, pp. 3-53. (,7 World Bank, Global DClJclopmCJ/1 Finance 2001, World Bank, Washington, U.C., 2001; C. C:hang, E. Fernandcz-Arias, and L. Serven, Mcasllrillg Aid FII)14�S: A nem Appronch, World Bank Working Paper No. 2050, World Bank, Washington, D.C., 1999. (1* United Nations, International Conference Oll Financing for Developrnent, Draft Outcome prepared by the Facilitator, Mauricio Escanero, undated, available at: ,.

1,1 Jagdish Bhagwati, Globa/izaticm: The Questioll 0{ "App"'priale Governance*', keynote speech given at Taegu, Korea at award of Sang-don Suh Pnze, 7 October 1999, available at: «littp://www.coliiiiibi.,i.cdtl/-jb38/ Tacgu.pdf �. 7it Richard Clarida, C3 Exchange Rate Re/aliollships: A Recap of the Record and Review 0{ Pr,'posal.< β>r Chance, N13E11 Working Papier 7434, National Bureau of Economic Research, Washinf,non, 1).C., 1999. 71 Peter H. Lindert and Jeffrey C�. Williamson, Unes Globa/izati"1I Make the World More Unrqnal? Ni3Ei� Working Papier 8228, National l3ureau of Economic Research, Washington, D.C., April 2001, availablc at: «»; 1'hilip Lanc and Gian Maria Milcsi-Firctti, External Capital Striictiire: 77leory and Evidence, InnF Working Papcr 152, Intcrnatinnal Monctary Fund, Washington, D.C., August 2000. 72 European Parliament, Report Oll the International Monetary Systern-How to Make it Work Better and Avoid Futnre Crises, (2000/2017([N))), Committee on Economic and Fiscal Affairs, 13 September 2001; Eurostat, News Release: World Tradc Organisation Ministerial Conference, The ELl i 1-�iZiiresf(ir tlre Dolza Conference, Qatar, 9-1 3 Nnvernher 2001.

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m Jod B. Slemrod, Tax Policy loward Foreign Dircct Investment in D£'"cloplllg Co 11 11 tr;£'s in Light o( Recent International Tax Clrarrgcs, in Anwar Shaw (ed.), Fisral IlIm,I;"es for 111"£'5Im""t and Innovation, Oxford Univcrsity Press, Oxford. U.K., )995. pp. 289-307; Jcan-Thomas Bernard and Robcrt J. Weiner, Multinational Co�βm�f�.t. Transfer Pr;{C5 anrl 7fM'f.<: Evidence from 1/'" !l.S. Petroleum Industry, in AssafRazin and Joel Slemrod (eds.). Taxatiorr in the Global Eronorny, The University of�:hicago Press, Chicago, )990. '10 R. I'ark, Fiscal Jurisdiction and Actual Basis Taxation: Liftino the Corporate liril 10 Tax Forc(�1I Company Profits, Co)nmbiaL.R..1978.p.)6()9. _ 'I[ J.R. Markuscn, The I3olllldtlr;es of Multinational Elllerpriscs and the Tlu·nry o( International Tradc, Journal of Economic Perspectivcs, Vol. 9, No. 2, 1995, pp. 169-189.

l'2 P. Osmllndsen, K.P. Hagen, and C. Schjclderup, bncrnatiorrally Mobile Firnis and 7f!.\ Policy, Journal of Intcrnatiunal Economics. Vol. 45. )998, pp. 97-1 13. 'jJ H. Katrak, Allllfilhlfitmal Finfls' Glohal StratC:Rics, Hast Cou1/tr)' 1I/{f�l!(,lIisafioll (�r()II'lIcrslllj) (l1Id rVc!l;nc,Journal ofDevftopmcntEconom)cs.Voi.).'i,)983,pp.331-348. 94 P. Conway and D. Wang, Managing Foreign Direct 11I/lcstmcnt: COl1llllitl111'llt, Deterrcnce, and DiFlTsiol1, Pacific Economic Review, Vol. 3, 1998, pp. 13-31. '1:; Amar K. Parai. Profit Tax and Tariff wider International Oligolrnly, Intcrnational Review of Economics and Financc, Vol. 8, 1999, pp. 317-326. at p. 325.

96 Grzegorz W. Kolodko, Globalizatiort and Catcliip(�-iip: Front Rcrcssinn to C:rou�tlr in Transition Econoniies, Communist and Post-Communist Studies, Vol. 34, 2001, pp. 279-322. (J7 Gcorgc Agiomirgianakis and Athina Zcrvoyianni, Glohalizatiofl oj Labor Markets and iHarro('wllo111ic Equilibrium, International Review of Econornics and Finance, Vol. 10, 2001, pp. 109-133.

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