Capital Inflows Financial Development And Domestic Investment

Author : Ms.Oana Luca,Mr.Nicola Spatafora
Publisher : International Monetary Fund
Page : 37 pages
File Size : 44,7 Mb
Release : 2012-05-01
Category : Business & Economics
ISBN : 9781475518863

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Capital Inflows, Financial Development, and Domestic Investment by Ms.Oana Luca,Mr.Nicola Spatafora Pdf

We examine determinants of, and interactions between, capital inflows, financial development, and domestic investment in developing countries during 2001-07, a period of surging global liquidity and low interest rates. Reductions in the global price of risk and in domestic borrowing costs were the main contributors to the increase over time in net capital inflows and domestic credit. However, the large cross-country differences in domestic and international finance are best explained by fundamentals such as institutional quality, access to international export markets, and an appropriate macroeconomic policy. Both private capital inflows and domestic credit exert a positive effect on investment; they also mediate most of the investment impact of the global price of risk and domestic borrowing costs. Surprisingly, neither greater domestic credit nor greater institutional quality increase the extent to which capital inflows translate into domestic investment.

Author : Nicola Spatafora,Oana Luca
Publisher : Unknown
Page : 23 pages
File Size : 45,9 Mb
Release : 2012-05-01
Category : Electronic
ISBN : OCLC:794377979

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Capital Inflows, Financial Development, and Domestic Investment by Nicola Spatafora,Oana Luca Pdf

We examine determinants of, and interactions between, capital inflows, financial development, and domestic investment in developing countries during 2001-07, a period of surging global liquidity and low interest rates. Reductions in the global price of risk and in domestic borrowing costs were the main contributors to the increase over time in net capital inflows and domestic credit. However, the large cross-country differences in domestic and international finance are best explained by fundamentals such as institutional quality, access to international export markets, and an appropriate macroeconomic policy. Both private capital inflows and domestic credit exert a positive effect on investment; they also mediate most of the investment impact of the global price of risk and domestic borrowing costs. Surprisingly, neither greater domestic credit nor greater institutional quality increase the extent to which capital inflows translate into domestic investment.

Author : Bailliu, Jeannine N,Bank of Canada
Publisher : Unknown
Page : 22 pages
File Size : 44,5 Mb
Release : 2000
Category : Capital movements Developing countries 1971-
ISBN : OCLC:641542179

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Private Capital Flows, Financial Development, and Economic Growth in Developing Countries [electronic Resource] by Bailliu, Jeannine N,Bank of Canada Pdf

Author : Ashoka Mody,Antu Panini Murshid
Publisher : International Monetary Fund
Page : 38 pages
File Size : 51,5 Mb
Release : 2002-04
Category : Business & Economics
ISBN : UCSD:31822029718160

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Growing Up with Capital Flows by Ashoka Mody,Antu Panini Murshid Pdf

In a sample of 60 developing countries, we find evidence of a strong-almost one-to-one-relationship between capital inflows and domestic investment. However, this relationship has evolved over time. While growing financial integration with the rest of the world has increased access to foreign private capital, the relationship between foreign capital and domestic investment has weakened, reflecting changes in the composition of inflows, offsetting outflows, and increased foreign-currency reserve requirements. In contrast, better policies have not only brought in more capital but also, especially for foreign direct investment, have tended to strengthen the relationship between foreign capital and domestic investment.

Author : The World Bank
Publisher : World Bank Publications
Page : 171 pages
File Size : 46,9 Mb
Release : 2013-05-16
Category : Business & Economics
ISBN : 9780821399552

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Capital for the Future by The World Bank Pdf

The gradual acceleration of growth in developing countries is a defining feature of the past two decades. This acceleration came with major shifts in patterns of investment, saving, and capital flows. This second volume in the Global Development Horizons series analyzes these shifts and explores how they may evolve through 2030. Average domestic saving in developing countries stood at 34 percent of their GDP in 2010, up from 24 percent in 1990, while their investment was around 33 percent of their GDP in 2012, up from 26 percent. These trends in saving and investment, along with higher growth rates in developing countries, have resulted in developing countries’ share of global savings now standing at 46 percent, nearly double the level of the 1990s. The presence of developing countries on the global stage will continue to expand over the next two decades. Analysis in this report projects that by 2030, China will account for 30 percent of global investment activity, far and away the largest share of any single country, while India and Brazil (at 7 percent and 3 percent) will account for shares comparable to those of the United States and Japan (11 percent and 5 percent). The complex interaction among aging, growth, and financial deepening can be expected to result in a world where developing countries will contribute 62 of every 100 dollars of world saving in 2030, up from 45 dollars in 2010, and where they account for between $6.2 trillion and $13 trillion of global gross capital flows, rising from $1.3 trillion in 2010. Trends in investment, saving, and capital flows through 2030 will affect economic conditions from the household level to the global macroeconomic level, with implications not only for national policy makers but also for international institutions and policy coordination. Policymakers preparing for this change will benefit from a better understanding of the unfolding dynamics of global capital and wealth in the future. This book is accompanied by a website, http://www.worldbank.org/CapitalForTheFuture, that includes a host of related electronic resources: data sets underlying the two main scenarios presented in the report, background papers, technical appendixes, interactive widgets with variations to some of the assumptions used in the projections, and related audio and video resources.

Author : Ms.Deniz Igan,Zhibo Tan
Publisher : International Monetary Fund
Page : 31 pages
File Size : 47,6 Mb
Release : 2015-08-19
Category : Business & Economics
ISBN : 9781513581262

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Capital Inflows, Credit Growth, and Financial Systems by Ms.Deniz Igan,Zhibo Tan Pdf

Exploiting a granular panel dataset that breaks down capital inflows into FDI, portfolio and other categories, and distinguishes between credit to the household sector and to the corporate sector, we investigate the association between capital inflows and credit growth. We find that non-FDI capital inflows boost credit growth and increase the likelihood of credit booms in both household and corporate sectors. For household credit growth, the composition of capital inflows appears to be more important than financial system characteristics. In contrast, for corporate credit growth, both the composition and the financial system matter. Regardless of sectors and financial systems, net other inflows are always linked to rapid credit growth. Firm-level data corroborate these findings and hint at a causal link: net other inflows are related to more rapid credit growth for firms that rely more heavily on external financing. Further explorations on how capital flows translate into more credit indicate that both demand and supply side factors play a role.

Author : Ann E. Harrison,Inessa Love,Margaret S. McMillan
Publisher : World Bank Publications
Page : 54 pages
File Size : 53,6 Mb
Release : 2002
Category : Capital movements
ISBN : 8210379456XXX

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Global Capital Flows and Financing Constraints by Ann E. Harrison,Inessa Love,Margaret S. McMillan Pdf

Firms often cite financing constraints as one of their primary obstacles to investment. Global capital flows, by bringing in scarce capital, may ease host-country firms' financing constraints. However, if incoming foreign investors borrow heavily from domestic basnks, direct foreign investment (DFI) may exacerbate financing constraints by crowding host country firms out of domestic capital markets. Combininb a unique cross-country firm-level panel with time-series data on restrictions on international transactions and capital flows, we find that different measures of global flows are associated with a reduction in firm-level financing constraints. First, we show that one type of capital inflow--DFI--is associated with a reduction in financing constraints. Second, we test whether restrictions on international transactions affect firms' financing constraints. Our results suggest that only one type of restriction--those on capital account transactions--negatively affect firms' financing constraints. We also show that multinational firms are not financially constrained and do not appear to be sensitive to the level of DFI. This implies that DFI eases financing constraints for non-multinational firms. Finally, we show that DFI only eases financing constraints in the non-G7 countries.

Author : Showkat Ali
Publisher : Taylor & Francis
Page : 200 pages
File Size : 45,9 Mb
Release : 1998
Category : Business & Economics
ISBN : 0815330731

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Capital Flows, Saving, and Investment in the World Economy by Showkat Ali Pdf

This study examines the major macroeconomic determinants and the structural relationships of current account variability, capital flows, saving and investment in open economies that are linked to the international financial markets. It explores the appropriateness of domestic policy responses (such as money stock growth, government spending, openness criteria, GDP growth) and the size of population or the impact of external shocks (such as exchange rate variability and the terms of trade uncertainty) for determining the domestic saving-investment comovement and capital flows worldwide. This analysis finds that even high positive correlations between national saving and investment rates could naturally arise within a perfect capital mobility framework where domestic policy variability and external shocks are likely to play a significant role for capital inflow.

Author : Mr.Thierry Tressel,Dennis B. S. Reinhardt,Mr.Luca Antonio Ricci
Publisher : International Monetary Fund
Page : 46 pages
File Size : 43,9 Mb
Release : 2010-10-01
Category : Business & Economics
ISBN : 9781455209354

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International Capital Flows and Development by Mr.Thierry Tressel,Dennis B. S. Reinhardt,Mr.Luca Antonio Ricci Pdf

Does capital flow from rich to poor countries? We revisit the Lucas paradox and explore the role of capital account restrictions in shaping capital flows at various stages of economic development. We find that, when accounting for the degree of capital account openness, the prediction of the neoclassical theory is confirmed: less developed countries tend to experience net capital inflows and more developed countries tend to experience net capital outflows, conditional of various countries’ characteristics. The findings are driven by foreign direct investment, portfolio equity investment, and to some extent by loans to the private sector.

Author : Ms.Deniz O Igan,Ali M. Kutan,Ali Mirzae
Publisher : International Monetary Fund
Page : 50 pages
File Size : 52,8 Mb
Release : 2016-12-06
Category : Business & Economics
ISBN : 9781475558562

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Real Effects of Capital Inflows in Emerging Markets by Ms.Deniz O Igan,Ali M. Kutan,Ali Mirzae Pdf

We examine the association between capital inflows and industry growth in a sample of 22 emerging market economies from 1998 to 2010. We expect more external finance dependent industries in countries that host more capital inflows to grow disproportionately faster. This is indeed the case in the pre-crisis period of 1998–2007, and is driven by debt, rather than equity, inflows. We also observe a reduction in output volatility but this association is more pronounced for equity, rather than debt, inflows. These relationships, however, break down during the crisis, hinting at the importance of an undisrupted global financial system for emerging markets to harness the growth benefits of capital inflows. In line with this observation, we also document that the inflows-growth nexus is stronger in countries with well-functioning banks.

Author : S. Motamen-Samadian
Publisher : Springer
Page : 180 pages
File Size : 54,6 Mb
Release : 2005-09-20
Category : Business & Economics
ISBN : 9780230597969

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Capital Flows and Foreign Direct Investments in Emerging Markets by S. Motamen-Samadian Pdf

This book presents the latest findings on the impact of capital flows and foreign direct investments (FDI) on macroeconomic variables and financial development of emerging markets. Each chapter concentrates on a different region and explores the significance of specific factors that can attract FDI to that region. They highlight the importance of political stability, as well as social and economic freedom in attracting FDIs. The studies also show the extent by which African and Middle Eastern countries have lagged behind other emerging markets and the need for urgent adjustment policies.

Author : Maxwell J. Fry
Publisher : World Bank Publications
Page : 35 pages
File Size : 45,5 Mb
Release : 1993
Category : Developing countries
ISBN : 8210379456XXX

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Foreign Direct Investment in a Macroeconomic Framework by Maxwell J. Fry Pdf

Does foreign direct investment affect national saving both directly and indirectly through the rate of economic growth? It depends on which countries you're talking about. Pacific Basin countries appear to differ markedly from some other developing countries.

Author : Mr.Ali J Al-Sadiq
Publisher : International Monetary Fund
Page : 28 pages
File Size : 41,5 Mb
Release : 2013-02-26
Category : Business & Economics
ISBN : 9781475517934

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Outward Foreign Direct Investment and Domestic Investment by Mr.Ali J Al-Sadiq Pdf

Over the past two decades, the growth rate of outward foreign direct investment (FDI) from developing and transition economies has increased significantly. Given the role of physical capital accumulation in determining the economic growth rate, it is important to assess how domestic investment responds to such outflows. This study empirically examines the effects of outward FDI on domestic investment in developing countries. Using data from 121 developing and transition economies over the period 1990–2010, the results suggest that FDI outflows negatively impact the rate of domestic investment.

Author : Eswar S. Prasad,Eswar Prasad,Raghuram G. Rajan,Arvind Subramanian
Publisher : Unknown
Page : 76 pages
File Size : 53,7 Mb
Release : 2007
Category : Capital movements
ISBN : PSU:000062644761

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Foreign Capital and Economic Growth by Eswar S. Prasad,Eswar Prasad,Raghuram G. Rajan,Arvind Subramanian Pdf

We document the recent phenomenon of "uphill" flows of capital from nonindustrial to industrial countries and analyze whether this pattern of capital flows has hurt growth in nonindustrial economies that export capital. Surprisingly, we find that there is a positive correlation between current account balances and growth among nonindustrial countries, implying that a reduced reliance on foreign capital is associated with higher growth. This result is weaker when we use panel data rather than cross-sectional averages over long periods of time, but in no case do we find any evidence that an increase in foreign capital inflows directly boosts growth. What explains these results, which are contrary to the predictions of conventional theoretical models? We provide some evidence that even successful developing countries have limited absorptive capacity for foreign resources, either because their financial markets are underdeveloped, or because their economies are prone to overvaluation caused by rapid capital inflows.

Author : French-Davis Ricardo,Reisen Helmut
Publisher : OECD Publishing
Page : 240 pages
File Size : 52,6 Mb
Release : 1998-10-09
Category : Electronic
ISBN : 9789264163454

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Development Centre Studies Capital Flows and Investment Performance Lessons from Latin America by French-Davis Ricardo,Reisen Helmut Pdf

This book, the result of a joint project between the OECD Development Centre and the UN Economic Commission for Latin America and the Caribbean (ECLAC), examines the policies of a group of major Latin American countries faced with large inflows.