Abstract
The purpose of this paper is to analyse and discuss those factors which are contributing to the expansion of US FDI in real estate. The empirical results of this model of FDI in real estate show that as US foreign financial liabilities increase, there is an accompanying increase in its FDI in real estate. This result is consistent with the study by Russekh, F., Ruffin, R., 1986. The role of foreign direct investment in US capital flows. Am. Econ. Rev. 76, 1127–1130, who showed that US FDI abroad is a substitute for US financial assets. Furthermore, the empirical results indicate that as returns from the US stock market decline, there are more incentives for US investors to invest in foreign real estate. The empirical results also show that US financial wealth, US FDI in manufacturing and banking and US bilateral trade contribute positively to the expansion of US FDI in real estate.
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