Market transparency and international allocation of capital

Broll U, Eckwert B, Wong KKP (2018)
Asia-Pacific Journal of Regional Science 3(2): 421-429.

Zeitschriftenaufsatz | Veröffentlicht | Englisch
 
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Autor*in
Broll, Udo; Eckwert, BernhardUniBi; Wong, Keith K. P.
Abstract / Bemerkung
The paper analyzes the interaction between the domestic and foreign capital allocation of a multinational firm, and market transparency in the foreign country. Foreign capital investment is risky because of uncertainties about the host country’s institutions and market conditions. We model transparency through a publicly observable signal that provides information about the quality of institutions and market conditions in the foreign country. Under higher transparency, the public signal conveys more precise information. It is shown that higher transparency leads to more dispersion of conditionally expected foreign country risks as they become more sensitive to the realization of the public signal. We characterize conditions under which more transparency encourages or discourages foreign investment. Regardless of the volume of capital flows, the ex-ante expected total cash flow of the firm always increases with more transparency .
Stichworte
International capital allocation Country risk Public information Transparency
Erscheinungsjahr
2018
Zeitschriftentitel
Asia-Pacific Journal of Regional Science
Band
3
Ausgabe
2
Seite(n)
421-429
ISSN
2509-7946
eISSN
2509-7954
Page URI
https://pub.uni-bielefeld.de/record/2946650

Zitieren

Broll U, Eckwert B, Wong KKP. Market transparency and international allocation of capital. Asia-Pacific Journal of Regional Science. 2018;3(2):421-429.
Broll, U., Eckwert, B., & Wong, K. K. P. (2018). Market transparency and international allocation of capital. Asia-Pacific Journal of Regional Science, 3(2), 421-429. doi:10.1007/s41685-018-0101-5
Broll, U., Eckwert, B., and Wong, K. K. P. (2018). Market transparency and international allocation of capital. Asia-Pacific Journal of Regional Science 3, 421-429.
Broll, U., Eckwert, B., & Wong, K.K.P., 2018. Market transparency and international allocation of capital. Asia-Pacific Journal of Regional Science, 3(2), p 421-429.
U. Broll, B. Eckwert, and K.K.P. Wong, “Market transparency and international allocation of capital”, Asia-Pacific Journal of Regional Science, vol. 3, 2018, pp. 421-429.
Broll, U., Eckwert, B., Wong, K.K.P.: Market transparency and international allocation of capital. Asia-Pacific Journal of Regional Science. 3, 421-429 (2018).
Broll, Udo, Eckwert, Bernhard, and Wong, Keith K. P. “Market transparency and international allocation of capital”. Asia-Pacific Journal of Regional Science 3.2 (2018): 421-429.

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