Late to the game? Capital flows to the Western Balkans

April 7, 2017

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Format: Chicago

Zsoka Koczan. Late to the game? Capital flows to the Western Balkans, (USA: International Monetary Fund, 2017) accessed September 18, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

The boom and bust in capital flows to the New Member States of the European Union have received a considerable amount of attention; foreign direct investment and bank flows to the region and countries’ participation in regional supply chains have been well-documented. Relatively little has, however, been written about capital flows to the Western Balkans economies, which are often perceived to be ‘late arrivals’ to large capital flows. This paper aims to examine how capital flows to the Western Balkans compare with flows to the New Member States, in terms of levels as well as dynamics. We find that while financial integration took off somewhat later in the Western Balkans than in the New Member States, it has increased rapidly, despite still much lower capital account openness. Capital inflows as a share of GDP are comparable to those observed in the New Member States, (perhaps surprisingly) diverse in terms of source countries and broadly similar in composition, though with equity shares higher than they were in the New Member States at comparable levels of GDP per capita.

Subject: Balance of payments, Capital account, Capital flows, Capital inflows, Capital outflows, Financial institutions, Foreign direct investment, Stocks

Keywords: Capital flows, Capital inflows, Capital outflow, Capital outflows, Cross-border capital flow, Equity share, FDI inflow, Flows to the Western Balkans, Foreign direct investment, Global, Greenfield FDI, Inflows to the Western Balkans, Interest rate differential, Outflows from the Western Balkans, Portfolio equity investment, Stocks, Terms of trade, Western Balkans, Western Balkans economy, WP

Publication Details

Pages:

26
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2017/092
Stock No:

WPIEA2017092
ISBN:

9781475593501
ISSN:

1018-5941

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