02095cas a2200265 a 4500 AALejournalIMF008442 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451856842 1018-5941 BD-DhAAL BD-DhAAL Razin, Assaf. The Role of Information in Driving FDI Flows : Host-Country Transparency and Source-Country Specialization / Assaf Razin, Ashoka Mody, Efraim Sadka. Washington, D.C. : International Monetary Fund, 2003. 1 online resource (29 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students We develop a simple information-based model of FDI flows. On the one hand, the abundance of "intangible" capital in specialized industries in the source countries, which presumably generates expertise in screening investment projects in the host countries, enhances FDI flows. On the other hand, host-country corporate-transparency diminishes the value of this expertise, thereby reducing the flow of FDI. Empirical evidence (from a sample of 9 source countries and 13 host countries over the 1980s and 1990s), analyzed in a gravity-equation model, provides support for the theoretical hypotheses. The model also demonstrates that the gains for the host country from FDI (over foreign portfolio investment (FPI)) are reflected in a more efficient size of the stock of domestic capital and its allocation across firms. These gains are shown to depend crucially (and positively) on the degree of competition among FDI investors. Mode of access: Internet Mody, Ashoka. Sadka, Efraim. IMF Working Papers; Working Paper ; No. 2003/148 Full text available on IMF http://elibrary.imf.org/view/journals/001/2003/148/001.2003.issue-148-en.xml IMF e-Library