Abstract
We investigate the relationship between economic growth and lagged international capital flows, disaggregated into FDI, portfolio investment, equity investment, and short-term debt. We follow about 100 countries during 1990-2010 when emerging markets became more integrated into the international financial system. We look at the relationship both before and after the global crisis. Our study reveals a complex and mixed picture. The relationship between growth and lagged capital flows depends on the type of flows, economic structure, and global growth patterns. We find a large and robust relationship between FDI - both inflows and outflows - and growth. The relationship between growth and equity flows is smaller and less stable. Finally, the relationship between growth and short-term debt is nil before the crisis, and negative during the crisis.
Original language | English |
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Pages (from-to) | 371-396 |
Number of pages | 26 |
Journal | Open Economies Review |
Volume | 24 |
Issue number | 3 |
DOIs | |
State | Published - 1 Jul 2013 |
Externally published | Yes |
Keywords
- Capital flows
- Economic growth
- Equity investment
- FDI
- Financial crisis
- Financial integration
- Portfolio investment
- Short-term debt
ASJC Scopus subject areas
- Economics and Econometrics