Chapter 22 - Role of Multinational Corporations in Financial Globalization

Abstract

We present a selective review of the financial globalization literature with a specific focus on the role of multinational corporations (MNCs). Foreign direct investment (FDI) has been one of the important conduits of the globalization process and most of the FDI is undertaken by MNCs. We describe both macro- and microevidence not only on the determinants of FDI but also on the effects of FDI on economic growth. In light of the previous emerging market and the recent global financial crisis, we also describe the literature on financial integration, volatility, and financial crises.