Three essays on international capital flows

The three essays in this dissertation examine different aspects of international investment. Studies of the effects of exchange rate levels and volatilities on foreign direct investment have arrived at a variety of conclusions. My first paper "Exchange Rates and Foreign Direct Investment in OECD Countries--An Empirical Investigation," reexamines these effects on inward and outward FDI for a group of OECD countries. This sample is wider, more frequent and longer than those used in earlier studies. The study also incorporates non-exchange rate factors in an effort to determine what drives FDI flows. It is seen that very rarely do exchange rates affect FDI as predicted. However, the non-exchange rate factors are more useful in explaining FDI flows.;In the second essay, "Bank Lending to LDCs--1972-1982: An Empirical Investigation Using High-Frequency Data," (coauthored with Angelos Antzoulatos) we use recently compiled, monthly data to analyze the determinants of syndicated loans to Latin American and East Asian countries, for the period 1972 to 1982. Our results indicate that the loans appear to have been driven more by supply-side factors than by those on the demand side. This lends some credence to the overlending hypothesis over the alternative that the loans were determined by economic fundamentals in the borrowing countries. The results, however, do not provide any evidence that the countries afflicted by the "debt crisis" (mainly in Latin America) differed in their borrowing behavior from those which were not (mainly in East Asia).;The third essay is entitled "On the Relationship Between Foreign Portfolio Investment and Foreign Direct Investment into Emerging Markets." In this essay, I test for econometric causality between these two kinds of capital flows into 15 emerging markets over the past two to three decades. Next I perform tests to identify determinants of each of these forms of foreign investment for each of these countries. Finally, I include the causal factors from the causality tests into the investment determination equations. Upon testing these factors for significance, as is done in Granger-causality tests, the results of the causality tests are largely borne out.