Gross Private Capital Flows To Emerging Markets

Author : Swarnali Ahmed Hannan
Publisher : International Monetary Fund
Page : 22 pages
File Size : 54,7 Mb
Release : 2018-09-28
Category : Business & Economics
ISBN : 9781484378281

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Revisiting the Determinants of Capital Flows to Emerging Markets--A Survey of the Evolving Literature by Swarnali Ahmed Hannan Pdf

This paper documents the evolution of gross and net capital flows to emerging market economies and surveys the large literature on the potential drivers. While the capital flow landscape has been shaped by the evolution of both global and country-specific factors, the relative importance of these factors has varied over time and differs depending on the type of capital flows. The findings from the survey of the literature thus underscores the importance of policies in both source and recipient countries in shaping capital flows.

Author : Erlend Nier,Tahsin Saadi Sedik,Tomas Mondino
Publisher : International Monetary Fund
Page : 35 pages
File Size : 48,5 Mb
Release : 2014-10-27
Category : Business & Economics
ISBN : 9781498352925

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Gross Private Capital Flows to Emerging Markets by Erlend Nier,Tahsin Saadi Sedik,Tomas Mondino Pdf

This paper assesses empirically the key drivers of private capital flows to a large sample of emerging market economies in the last decade. It analyzes the effect of the global financial cycle, measured by the VIX, on capital flows and investigates the role of fundamentals and country characteristics in mitigating or amplifying its effect. Using interaction models, we find the effect of the VIX to be non-linear. For low levels of the VIX, capital flows are driven by fundamental factors. During periods of stress, the VIX becomes the dominant driver of capital flows while other determinants, with the exception of interest rate differentials, lose statistical significance. Our results also suggest that the effect of global financial conditions on gross private capital flows increases with the host country’s level of financial sector development. Finally, our results imply that countries cannot fully insulate themselves from global financial shocks, unless creating a fragmented global financial system.

Author : Mr.John C Bluedorn,Rupa Duttagupta,Mr.Jaime Guajardo,Petia Topalova
Publisher : International Monetary Fund
Page : 38 pages
File Size : 45,7 Mb
Release : 2013-08-22
Category : Business & Economics
ISBN : 9781484389041

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Capital Flows are Fickle by Mr.John C Bluedorn,Rupa Duttagupta,Mr.Jaime Guajardo,Petia Topalova Pdf

Has the unprecedented financial globalization of recent years changed the behavior of capital flows across countries? Using a newly constructed database of gross and net capital flows since 1980 for a sample of nearly 150 countries, this paper finds that private capital flows are typically volatile for all countries, advanced or emerging, across all points in time. This holds true across most types of flows, including bank, portfolio debt, and equity flows. Advanced economies enjoy a greater substitutability between types of inflows, and complementarity between gross inflows and outflows, than do emerging markets, which reduces the volatility of their total net inflows despite higher volatility of the components. Capital flows also exhibit low persistence, across all economies and across most types of flows. Inflows tend to rise temporarily when global financing conditions are relatively easy. These findings suggest that fickle capital flows are an unavoidable fact of life to which policymakers across all countries need to continue to manage and adapt.

Author : Maria Sole Pagliari,Swarnali Ahmed Hannan
Publisher : International Monetary Fund
Page : 58 pages
File Size : 49,6 Mb
Release : 2017-03-07
Category : Business & Economics
ISBN : 9781475585261

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The Volatility of Capital Flows in Emerging Markets by Maria Sole Pagliari,Swarnali Ahmed Hannan Pdf

Capital flow volatility is a concern for macroeconomic and financial stability. Nonetheless, literature is scarce in this topic. Our paper sheds light on this issue in two dimensions. First, using quarterly data for 65 countries over the period 1970Q1-2016Q1, we construct three measures of volatility, for total capital flows and key instruments. Second, we perform panel regressions to understand the determinants of volatility. The measures show that the volatility of all instruments is prone to bouts, rising sharply during global shocks like the taper tantrum episode. Capital flow volatility thus remains a challenge for policy makers. The regression results suggest that push factors can be more important than pull factors in explaining volatility, illustrating that the characteristics of volatility can be different from those of the flows levels.

Author : Swarnali Ahmed Hannan
Publisher : International Monetary Fund
Page : 26 pages
File Size : 53,6 Mb
Release : 2017-03-13
Category : Business & Economics
ISBN : 9781475586787

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The Drivers of Capital Flows in Emerging Markets Post Global Financial Crisis by Swarnali Ahmed Hannan Pdf

Using a sample of 34 emerging markets and developing economies over the period 2009Q3-2015Q4, the paper employs a panel framework to study the determinants of capital flows, both net and gross, across a wide range of instruments. The baseline regressions are then extended to focus on high and low episodes – quarters with flows one standard deviation above/below mean. Overall, the results suggest that the capital flow slowdown witnessed in recent years is due to a combination of lower growth prospects of recipient countries and worse global risk sentiment. However, the determinants of flows can be considerably different across instruments and across the type of flows considered, net or gross. The sensitivity of certain types of flows, towards push and pull factors, increases during periods of high and low capital flows. Moreover, some variables may not necessarily be significant during normal times, but can be important drivers during such episodes, and vice versa. Indicators like the gap between the U.S. long- and short-term maturity bond yields – not significant during normal times – can be an important driver during high episodes.

Author : Mr.Eugenio Cerutti,Mr.Stijn Claessens,Mr.Damien Puy
Publisher : International Monetary Fund
Page : 43 pages
File Size : 54,5 Mb
Release : 2015-06-22
Category : Business & Economics
ISBN : 9781513526638

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Push Factors and Capital Flows to Emerging Markets by Mr.Eugenio Cerutti,Mr.Stijn Claessens,Mr.Damien Puy Pdf

This paper analyzes the behavior of gross capital inflows across 34 emerging markets (EMs). We first confirm that aggregate inflows to EMs co-move considerably. We then report three findings: (i) the aggregate co-movement conceals significant heterogeneity across asset types as only bank-related and portfolio bond and equity inflows do co-move; (ii) while global push factors in advanced economies mostly explain the common dynamics, their relative importance varies by type of flow; and (iii) the sensitivity to common dynamics varies significantly across borrower countries, with market structure characteristics (especially the composition of the foreign investor base and the level of liquidity) rather than borrower country’s institutional fundamentals strongly affecting sensitivities. Countries relying more on international funds and global banks are found to be more sensitive to push factors. Our findings suggest that EMs need to closely monitor their lenders and investors to assess their inflow exposures to global push factors.

Author : Guillermo Calvo,Morris Goldstein,Eduard Hochreiter
Publisher : Peterson Institute
Page : 362 pages
File Size : 45,6 Mb
Release : 1996
Category : Business & Economics
ISBN : UCSD:31822023728405

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Private Capital Flows to Emerging Markets After the Mexican Crisis by Guillermo Calvo,Morris Goldstein,Eduard Hochreiter Pdf

Author : Ms.Deniz O Igan,Ali M. Kutan,Ali Mirzae
Publisher : International Monetary Fund
Page : 50 pages
File Size : 51,6 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 : Eugenio Cerutti,Stijn Claessens,Damien Puy
Publisher : Unknown
Page : 43 pages
File Size : 44,6 Mb
Release : 2015
Category : Banks and banking, International
ISBN : 1513530003

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Push Factors and Capital Flows to Emerging Markets by Eugenio Cerutti,Stijn Claessens,Damien Puy Pdf

This paper analyzes the behavior of gross capital inflows across 34 emerging markets (EMs). We first confirm that aggregate inflows to EMs co-move considerably. We then report three findings: (i) the aggregate co-movement conceals significant heterogeneity across asset types as only bank-related and portfolio bond and equity inflows do co-move; (ii) while global push factors in advanced economies mostly explain the common dynamics, their relative importance varies by type of flow; and (iii) the sensitivity to common dynamics varies significantly across borrower countries, with market structure characteristics (especially the composition of the foreign investor base and the level of liquidity) rather than borrower country's institutional fundamentals strongly affecting sensitivities. Countries relying more on international funds and global banks are found to be more sensitive to push factors. Our findings suggest that EMs need to closely monitor their lenders and investors to assess their inflow exposures to global push factors. --Abstract.

Author : Sudarshan Gooptu
Publisher : World Bank Publications
Page : 74 pages
File Size : 47,7 Mb
Release : 1993
Category : Electronic
ISBN : 8210379456XXX

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Portfolio Investment Flows to Emerging Markets by Sudarshan Gooptu Pdf

Author : Mr.Udaibir S. Das,Mr.Michael G. Papaioannou,Christoph Trebesch
Publisher : International Monetary Fund
Page : 40 pages
File Size : 47,6 Mb
Release : 2010-01-01
Category : Business & Economics
ISBN : 9781451961942

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Sovereign Default Risk and Private Sector Access to Capital in Emerging Markets by Mr.Udaibir S. Das,Mr.Michael G. Papaioannou,Christoph Trebesch Pdf

Top down spillovers of sovereign default risk can have serious consequences for the private sector in emerging markets. This paper analyzes the effects of these spillovers using firm-level data from 31 emerging market economies. We assess how sovereign risk affects corporate access to international capital markets, in the form of external credit (loans and bond issuances) and equity issuances. The study first analyzes the impact of sovereign debt crises during the 1980s and 1990s. It goes on to examine the 1993 to 2007 period, using additional measures of sovereign risk-sovereign bond spreads and sovereign ratings-as explanatory variables. Overall, we find that sovereign default risk is a crucial determinant of private sector access to capital, be it external debt or equity. We also find that crisis resolution patterns matter and that defaults towards private creditors have stronger adverse consequences than defaults to official creditors.

Author : Juliana Dutra Araujo,Mr.Antonio David,Carlos van Hombeeck,Mr.Chris Papageorgiou
Publisher : International Monetary Fund
Page : 41 pages
File Size : 54,6 Mb
Release : 2015-04-29
Category : Business & Economics
ISBN : 9781484341087

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Non-FDI Capital Inflows in Low-Income Developing Countries by Juliana Dutra Araujo,Mr.Antonio David,Carlos van Hombeeck,Mr.Chris Papageorgiou Pdf

Low-income countries (LIDCs) are typically characterized by intermittent and very modest access to private external funding sources. Motivated by recent developments in private flows to LIDCs this paper makes two contributions: First, it constructs a new comprehensive dataset on gross private capital flows with special focus on non-FDI flows in LIDCs. Concentrating on LIDCs and more specifically on gross non-FDI private flows is intentionally aimed at closing a gap in existing datasets where country coverage of developing economies is limited mainly to emerging markets (EMs). Second, using the new data, it identifies several shifting patterns of gross non-FDI private inflows to LIDCs. A surprising fact emerges: since the mid 2000's periods of surges in gross non-FDI private inflows in LIDCs are broadly comparable to those of EMs. Moreover, while gross non-FDI inflows to LIDCs are on average much lower than those to EMs, we show that the LIDC top quartile gross non-FDI inflow is comparable to the EM median inflow and converging to the EM top quartile inflow.

Author : Juliana Dutra Araujo,Mr. Antonio David,Carlos van Hombeeck,Chris Papageorgiou
Publisher : International Monetary Fund
Page : 42 pages
File Size : 53,9 Mb
Release : 2015-07-17
Category : Business & Economics
ISBN : 9781513552262

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Joining the Club? Procyclicality of Private Capital Inflows in Low Income Developing Countries by Juliana Dutra Araujo,Mr. Antonio David,Carlos van Hombeeck,Chris Papageorgiou Pdf

Using a newly developed dataset this paper examines the cyclicality of private capital inflows to low-income developing countries (LIDCs) over the period 1990-2012. The empirical analysis shows that capital inflows to LIDCs are procyclical, yet considerably less procyclical than flows to more advanced economies. The analysis also suggests that flows to LIDCs are more persistent than flows to emerging markets (EMs). There is also evidence that changes in risk aversion are a significant correlate of private capital inflows with the expected sign, but LIDCs seem to be less sensitive to changes in global risk aversion than EMs. A host of robustness checks to alternative estimation methods, samples, and control variables confirm the baseline results. In terms of policy implications, these findings suggest that private capital inflows are likely to become more procyclical as LIDCs move along the development path, which could in turn raise several associated policy challenges, not the least concerning the reform of traditional monetary policy frameworks.

Author : World Bank
Publisher : Washington, D.C. : World Bank
Page : 10 pages
File Size : 43,7 Mb
Release : 1997
Category : Capital movements
ISBN : 0821339265

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Private Capital Flows to Developing Countries by World Bank Pdf

Author : Sebastian Edwards,Márcio G. P. Garcia
Publisher : University of Chicago Press
Page : 299 pages
File Size : 40,9 Mb
Release : 2008-09-15
Category : Business & Economics
ISBN : 9780226185040

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Financial Markets Volatility and Performance in Emerging Markets by Sebastian Edwards,Márcio G. P. Garcia Pdf

Capital mobility is a double-edged sword for emerging economies, as governments must weigh the benefits of investment against the potential economic costs and political consequences of currency crises, devaluations, and instability. Financial Markets Volatility and Performance in Emerging Markets addresses the delicate balance between capital mobility and capital controls as developing countries navigate the convoluted global network of private investors, hedge funds, large corporations, and international institutions such as the International Monetary Fund. A group of experts here examine rapidly globalizing financial markets with regard to capital flows and crises, domestic credit, international financial integration, and economic policy. Featuring detailed analyses and cross-national comparisons of countries such as Brazil, Argentina, Uruguay, and Korea, this book will shape economists’ and policymakers’ understanding of the effectiveness of restrictions on capital mobility in the world’s most fragile economies.