Welfare implications of international financial integration

Jong Wha Lee; Kwanho Shin

doi:10.1016/j.japwor.2012.08.001

Welfare implications of international financial integration

Jong Wha Lee, Kwanho Shin

Research output: Contribution to journal › Article › peer-review

7 Citations (Scopus)

Abstract

Focusing on technology spillover from foreign direct investment (FDI) inflows, this paper investigates the welfare implications of financial integration. Calibrations of a neoclassical growth model with international technology diffusion show that when technology catch-up due to FDI inflows is considered, the welfare gains from financial integration substantially increase, which contrasts with the small gains from additional, capital-accumulation effects of financial integration. The estimates suggest that by further enhancing financial integration, emerging Asian economies, such as the People's Republic of China (PRC) and the largest four Association of Southeast Asian Nations (ASEAN) countries, will experience substantial welfare gains.

Original language	English
Pages (from-to)	235-245
Number of pages	11
Journal	Japan and the World Economy
Volume	24
Issue number	4
DOIs	https://doi.org/10.1016/j.japwor.2012.08.001
Publication status	Published - 2012 Dec

Bibliographical note

Funding Information:
We thank Donghyun Park for helpful suggestions. We gratefully acknowledge financial support from the ADB .

Keywords

Financial integration
Foreign direct investment
Technology diffusion

ASJC Scopus subject areas

Finance
Economics and Econometrics
Political Science and International Relations

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.japwor.2012.08.001

Cite this

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title = "Welfare implications of international financial integration",

abstract = "Focusing on technology spillover from foreign direct investment (FDI) inflows, this paper investigates the welfare implications of financial integration. Calibrations of a neoclassical growth model with international technology diffusion show that when technology catch-up due to FDI inflows is considered, the welfare gains from financial integration substantially increase, which contrasts with the small gains from additional, capital-accumulation effects of financial integration. The estimates suggest that by further enhancing financial integration, emerging Asian economies, such as the People's Republic of China (PRC) and the largest four Association of Southeast Asian Nations (ASEAN) countries, will experience substantial welfare gains.",

keywords = "Financial integration, Foreign direct investment, Technology diffusion",

author = "Lee, {Jong Wha} and Kwanho Shin",

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AU - Lee, Jong Wha

AU - Shin, Kwanho

N1 - Funding Information: We thank Donghyun Park for helpful suggestions. We gratefully acknowledge financial support from the ADB .

PY - 2012/12

Y1 - 2012/12

N2 - Focusing on technology spillover from foreign direct investment (FDI) inflows, this paper investigates the welfare implications of financial integration. Calibrations of a neoclassical growth model with international technology diffusion show that when technology catch-up due to FDI inflows is considered, the welfare gains from financial integration substantially increase, which contrasts with the small gains from additional, capital-accumulation effects of financial integration. The estimates suggest that by further enhancing financial integration, emerging Asian economies, such as the People's Republic of China (PRC) and the largest four Association of Southeast Asian Nations (ASEAN) countries, will experience substantial welfare gains.

AB - Focusing on technology spillover from foreign direct investment (FDI) inflows, this paper investigates the welfare implications of financial integration. Calibrations of a neoclassical growth model with international technology diffusion show that when technology catch-up due to FDI inflows is considered, the welfare gains from financial integration substantially increase, which contrasts with the small gains from additional, capital-accumulation effects of financial integration. The estimates suggest that by further enhancing financial integration, emerging Asian economies, such as the People's Republic of China (PRC) and the largest four Association of Southeast Asian Nations (ASEAN) countries, will experience substantial welfare gains.

KW - Financial integration

KW - Foreign direct investment

KW - Technology diffusion

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DO - 10.1016/j.japwor.2012.08.001

M3 - Article

AN - SCOPUS:84867938322

SN - 0922-1425

VL - 24

SP - 235

EP - 245

JO - Japan and the World Economy

JF - Japan and the World Economy

IS - 4

ER -

Welfare implications of international financial integration

Abstract

Bibliographical note

Keywords

ASJC Scopus subject areas

UN SDGs

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