{"id":1704,"date":"2023-02-13T16:19:19","date_gmt":"2023-02-13T16:19:19","guid":{"rendered":"https:\/\/www.fiw.ac.at\/publications\/financial-frictions-foreign-direct-investment-and-growth\/"},"modified":"2023-02-13T16:19:19","modified_gmt":"2023-02-13T16:19:19","slug":"financial-frictions-foreign-direct-investment-and-growth","status":"publish","type":"publication","link":"https:\/\/www.fiw.ac.at\/en\/publications\/financial-frictions-foreign-direct-investment-and-growth\/","title":{"rendered":"Financial Frictions, Foreign Direct Investment, and Growth"},"content":{"rendered":"\nThis paper assesses the role of financial frictions and Foreign Direct Investment (FDI) on an economy\u00b4s growth rate, business cycle volatility, and firm\u00b4s capital structure. We gauge these effects within the Financial Accelerator framework, where entrepreneurs can establish affiliates of local firms abroad through Foreign Direct Investment. Model simulations suggest that in the presence of credit market imperfections FDI is associated with faster growth, less leverage, and lower aggregate volatility. These features are consistent with the macroeconomic dynamics of the more globally integrated economies over the last three decades.\n\n","protected":false},"featured_media":0,"menu_order":0,"template":"","jelcode":[117,505,996],"keyword":[999,130,998,997],"class_list":["post-1704","publication","type-publication","status-publish","hentry","jelcode-e32","jelcode-f43","jelcode-g32","keyword-capital-structure","keyword-foreign-direct-investment","keyword-international-diversification","keyword-output-volatility"],"acf":{"year":2010,"month":1,"day":"","volume":"","number":"041","pages":32,"reviewed":"0","citeid":"FIW_WP_041","fiwseries":"FIW Working Papers","event":null},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Financial Frictions, Foreign Direct Investment, and Growth - FIW<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.fiw.ac.at\/en\/publications\/financial-frictions-foreign-direct-investment-and-growth\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Financial Frictions, Foreign Direct Investment, and Growth - FIW\" \/>\n<meta property=\"og:description\" content=\"This paper assesses the role of financial frictions and Foreign Direct Investment (FDI) on an economy\u00b4s growth rate, business cycle volatility, and firm\u00b4s capital structure. We gauge these effects within the Financial Accelerator framework, where entrepreneurs can establish affiliates of local firms abroad through Foreign Direct Investment. Model simulations suggest that in the presence of [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.fiw.ac.at\/en\/publications\/financial-frictions-foreign-direct-investment-and-growth\/\" \/>\n<meta property=\"og:site_name\" content=\"FIW\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.fiw.ac.at\/wp-content\/uploads\/2023\/03\/wifo_fiw_logo_short_rgb.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"843\" \/>\n\t<meta property=\"og:image:height\" content=\"293\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@CentreFiw\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.fiw.ac.at\/en\/publications\/financial-frictions-foreign-direct-investment-and-growth\/\",\"url\":\"https:\/\/www.fiw.ac.at\/en\/publications\/financial-frictions-foreign-direct-investment-and-growth\/\",\"name\":\"Financial Frictions, Foreign Direct Investment, and Growth - FIW\",\"isPartOf\":{\"@id\":\"https:\/\/www.fiw.ac.at\/en\/#website\"},\"datePublished\":\"2023-02-13T16:19:19+00:00\",\"dateModified\":\"2023-02-13T16:19:19+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/www.fiw.ac.at\/en\/publications\/financial-frictions-foreign-direct-investment-and-growth\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.fiw.ac.at\/en\/publications\/financial-frictions-foreign-direct-investment-and-growth\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.fiw.ac.at\/en\/publications\/financial-frictions-foreign-direct-investment-and-growth\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Startseite\",\"item\":\"https:\/\/www.fiw.ac.at\/en\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Publications\",\"item\":\"https:\/\/www.fiw.ac.at\/en\/publications\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Financial Frictions, Foreign Direct Investment, and Growth\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.fiw.ac.at\/en\/#website\",\"url\":\"https:\/\/www.fiw.ac.at\/en\/\",\"name\":\"FIW\",\"description\":\"\",\"publisher\":{\"@id\":\"https:\/\/www.fiw.ac.at\/en\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.fiw.ac.at\/en\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.fiw.ac.at\/en\/#organization\",\"name\":\"FIW\",\"url\":\"https:\/\/www.fiw.ac.at\/en\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.fiw.ac.at\/en\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.fiw.ac.at\/wp-content\/uploads\/2023\/03\/wifo_fiw_logo_kugel_rgb.png\",\"contentUrl\":\"https:\/\/www.fiw.ac.at\/wp-content\/uploads\/2023\/03\/wifo_fiw_logo_kugel_rgb.png\",\"width\":843,\"height\":843,\"caption\":\"FIW\"},\"image\":{\"@id\":\"https:\/\/www.fiw.ac.at\/en\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/x.com\/CentreFiw\"]}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Financial Frictions, Foreign Direct Investment, and Growth - FIW","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.fiw.ac.at\/en\/publications\/financial-frictions-foreign-direct-investment-and-growth\/","og_locale":"en_US","og_type":"article","og_title":"Financial Frictions, Foreign Direct Investment, and Growth - FIW","og_description":"This paper assesses the role of financial frictions and Foreign Direct Investment (FDI) on an economy\u00b4s growth rate, business cycle volatility, and firm\u00b4s capital structure. 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