Foreign Investors and Emerging Democracies Introduction A

Foreign Investors and Emerging Democracies

Introduction: A Research Agenda

Two Global Trends: A Democratic Wave …

… That has also been a Latin American Wave

A Second Global Trend During the 90´s: A boom of capital flows to emerging markets

Latin America also profited from this boom of capital inflow. . .

… which is correlated to growth

1. Are Foreign Direct Investors Politically Correct?

Foreign Direct Investors Perceptions: Most attractive FDI destinations 2003

Asia has overtaken both Latin America and Europe as a regional FDI destination

The Emerging Giants – China, Brazil, Mexico, India, and Poland

China’s lead over most emerging market destinations has strengthened

China displays a comparative advantage in most FDI attractive aspects

Comparative rates of stability among large emerging markets

Relative risk profiles among large emerging markets

But, what about Democracy ?

…and, Economic Freedom ?

And Property Rights ?

2. Wall Street and Emerging Democracies

Politics in Developing Countries Matter to Wall Street Investors

An Example: Calpers Screening of Developing Countries

Politics in Developing Countries Matter to Wall Street Analysts

But Are Financial Markets Politically Correct ?

Financial Markets and Emerging Democracies

Historically, institutional instability and political uncertainty have favoured crisis

The Timing Game: Political Cycles and Crises in Latin America

Mexico and the steady hand of the six-years period

A First Approach to Wall Street Political Preferences: The Index Game

The Index Game: Market Capitalisation

The Political Economy of Indexes

3. A Case Study: Wall Street and Brazilian Elections

Analysts Analyzed: Wall Street and the 2002 Brazilian Presidential Election.

Wall Street Shifting Involvements: The Lula Effect

Extreme Overreactions: Exit, Voice and Loyalty in Financial Markets

Brazilian Elections and Financial Markets: A Case Study in Historical Perspective.

Lula and Ciro Effect versus Cardoso Exit

In 2003: Wall Street ‘Mea Culpa’ and ’Love Affair’ With Lula

Lula Light: Institutional Reforms and Confidence Building

Lula Light: Institutional Reforms and Confidence Building

Lula’s Government Temporal Adjustment

Debt Intolerance and Serial Defaulters

Conclusion: Enter The Matrix of The Political Economy Capital Flows

In Search of a Better World: What About a Democratic Premium?

In Search of a Better World: Ethical Governance and Development