Working Papers in full text
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
All
Other research-related activities and publications of the IMF can be found at IMF Research
|
Free Email Notification
Receive emails when we post new
items of interest to you.
Subscribe or
Modify your profile
|
|
|
|
Capital Inflows, Financial Development, and Domestic Investment: Determinants and Inter-Relationships
|
Author/Editor: |
Luca, Oana | Spatafora, Nicola |
| Authorized for Distribution: |
May 1, 2012 |
|
Electronic Access: |
Free Full Text (PDF file size is 1,138KB)
Use the free Adobe Acrobat Reader to view this PDF file.
|
|
|
|
Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.
|
|
Summary: 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.
|
|
|
|
Order a print copy
|
|
Series: |
Working Paper No. 12/120 |
|
Subject(s): |
Capital inflows | Credit expansion | Developing countries | Development | Domestic investment | Economic growth | Economic models |
|
Author's keyword(s): |
Capital flows
| Financial Development
| Investment
| Developing Countries
|
|
|
|
|
| |
Published: |
|
May 1, 2012 |
|
|
|
|
| |
|
|
|
|
Format: |
|
Paper |
| |
Stock No: |
|
WPIEA2012120 |
|
Pages: |
|
21 |
| |
Price: |
|
US$18.00 (Academic Rate: US$18.00 )
|
|
|
|
|
|
|
