442
SVEN W. ARNDT
(11.27)	DN,° = - 715.33 + 8.39 IPost	R2 = -53
(1.77)
where DR" and DNa dénoté direct investment transactions between France and O.E.C.D. by residents and non-residents, respectively, and where T is a trend variable. The results for direct investment flows between France and North America were uniformly unsatisfactory. The explanatory powers of either interest rates or income variations were almost non-existent. We have no explanation for this except to point to the considérable scru-tiny imposed by the French authorities on U.S. investment in France. We would expect qualitative parameters to have played an important rôle.
(ii)	France - E. E. C.
The results here are somewhat improved over the North American situation. The following are of interest.
(11.28)	DNtc = - 74.67 + 1.31 IPOt	R2 = .51
(.29)
(11.29)	DN,C = - 97.85 + 1.48 IPEt	R2 = -49
(.34)
(iii)	France - Rest of O.E.C.D.
As in the case of O.E.C.D. in général, inclusion of both interest rates and income in the régression produced statistically insignificant coefficients for interest rates.
(11.30)	DRd = - 732.32 + 7.32 IPt - 16.73 T - 20.10 {iF-ivs)t R2 = .81
(2.42) (3.53) (40.02)
(11.31)	DRtd = - 569.29 + 6.35 IPt - 16.98 T - 40.73 (iF-is)t R2 = .84
(1.98) (2.76) (22.31)
(11.32)	DRd = 454.56 - 4.68 IPUKt	R2 = .56
(.94)
(11.33)	DNt" = - 420.15 + 4.69 IPUKt	R2 = .30
(1.60)
The overall explanatory power of the first two régressions especially is good; however, the interest variable has the wrong sign and is insignificant. The resuit showing transactions by non-residents is far from con-clusive; the rôle of direct flows from sources other than E.E.C. and North America is very small in relative as well as absolu te terms. (b) Portfolio Investment (i) France - O.E.C.D.