Patterns of Capital Flows to Emerging Markets: A Theoretical Perspective
IMF Working Papers, January 1, 1997
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- Patterns of Capital Flows to Emerging Markets: A Theoretical Perspective
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Bibliographic details
- Authors: Zhaohui Chen, Mohsin S. Khan
- Published: January 1, 1997
- Series: IMF Working Papers
Summary
- Paper reviews basic patterns of international capital flows to emerging markets in recent years, including:
- composition of capital flows
- intraregional flow patterns
- geographical distribution of the flows
- Develops a theoretical model focused on the cost of financing aspect of capital flows.
- Model shows patterns of capital flows are influenced by the combined effects of:
- financial market development in recipient countries
- growth potential in recipient countries
- Theoretical predictions are shown to be consistent with the stylized facts.
Theoretical model and core analysis
- Central focus: cost of financing as a driver of capital flow patterns.
- Key theoretical insight:
- Combined effects of financial market development and growth potential determine attractiveness and patterns of capital flows.
- Model outcomes:
- Explains observed composition, intraregional patterns, and geographical distribution of flows.
- Generates predictions that match stylized empirical facts described in the paper.
Empirical stylized facts reviewed
- Composition of capital flows (types of flows are discussed; paper reviews patterns, including portfolio investment and Foreign direct investment).
- Intraregional flow patterns.
- Geographical distribution across regions (includes references to Asia and Pacific, Sub-Saharan Africa, Western Hemisphere).
Subjects and keywords (as listed)
- Subjects: Balance of payments, Capital flows, Capital inflows, Emerging and frontier financial markets, Financial markets, Foreign direct investment, Portfolio investment
- Keywords: Asia and Pacific, capital flow, Capital flows, Capital inflows, contract and regulation, cost of financing, economy, Emerging and frontier financial markets, emerging markets, equity portfolio investor, expected return, Foreign direct investment, market, market efficiency configuration, market mechanism, market parameter, portfolio equity flow, portfolio flow, portfolio investment, Portfolio investment, Sub-Saharan Africa, Western Hemisphere, WP
Publication and document metadata
- Authors: Zhaohui Chen, Mohsin S. Khan
- Date: January 1, 1997
- Series: Working Paper No. 1997/013
- Issue: 013
- Volume: 1997
- Pages: 32
- Stock No: WPIEA0131997
- ISBN: 9781451924947
- ISSN: 1018-5941
Source: IMF Working Papers — "Patterns of Capital Flows to Emerging Markets: A Theoretical Perspective" by Zhaohui Chen and Mohsin S. Khan, January 1, 1997.
Content in this bundle
- Patterns of Capital Flows to Emerging Markets