operations in a large number of emerging markets, while others have renewed their cross-border operations, which had been severely cut back after the debt crisis of the 1980s. This recent expansion, sometimes called “third wave”, has mainly been analysed from the host country´s point of view (i.e., in terms of gains in the amount of loanable funds, efficiency or financial stability in the host contry). The main novelty of this article is to take a home country focus in reviewing the literature on the determinants and effects of financial sector FDI. It also takes a broad perspective, starting with the literature of the 1970s. The paper reviews the theoretical literature explaining financial FDI, as well as the empirical literature on its determinants and effects for the home country. Where no specific literature exists, we draw from existing findings for general FDI and draw conclusions when potentially applicable to financial FDI. Finally, we make suggestions on further research in areas where no specific literature exists or no clear consensus arises. 2See International Monetary Fund (2003) for further details 3The first was in the nineteenth century. See Jones (1990)
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