Trade in Financial Services and Capital Movements
IMF Working Papers, July 1, 1999
Source details
- Canonical URL
- Trade in Financial Services and Capital Movements
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Bibliographic details
- Authors: Natalia T. Tamirisa
- Published: July 1, 1999
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451851267.001
Research question and scope
- Examines how the liberalization of capital movements and financial services trade affects net private capital flows.
- Empirical setting: panel of OECD countries for 1990–96.
- Publication details highlighted in the source: Pages: 22; Volume: 1999; Issue: 089; Series: Working Paper No. 1999/089; DOI: https://doi.org/10.5089/9781451851267.001; Stock No: WPIEA0891999; ISBN: 9781451851267; ISSN: 1018-5941.
Key empirical findings
- Capital inflows tend to fall with the liberalization of commercial presence in banking and securities services.
- Capital inflows tend to rise with the liberalization of commercial presence in insurance services.
- Interpretation offered: the changes in capital inflows possibly reflect an increase (banking and securities) or decrease (insurance) in saving.
- Capital account liberalization is found to stimulate capital inflows, suggesting that better access to external financing helps sustain larger fiscal and current account deficits.
- When cross-border trade is liberalized, capital flows change insignificantly.
Thematic implications
- Financial services trade mode matters: liberalization of commercial presence (establishing a foreign presence) has different associations with capital inflows across sub‑sectors (banking, securities, insurance).
- Capital account openness influences the scale of capital inflows and may interact with fiscal and current account positions by facilitating external financing.
- Cross-border trade liberalization in financial services does not show a statistically significant association with net private capital flows in the sample period.
Subject classification and keywords
- Subject areas: Balance of payments, Capital controls, Capital flows, Capital inflows, Financial services, International trade, Trade in services.
- Keywords: A. capital movement, capital, capital constraint, Capital controls, capital flow, Capital flows, Capital inflows, capital mobility, financial service, financial service service sector, financial service supplier, liberalization, market discipline, market equilibrium, market participant, net capital flow, saving-investment gap, saving-investment imbalance, trade in financial services, Trade in services, WP.
Author and publication note
- By Natalia T. Tamirisa.
- Publication date: July 1, 1999.
- Format noted on the landing page: IMF Working Papers.
Source: Trade in Financial Services and Capital Movements, Natalia T. Tamirisa, IMF Working Paper, July 1, 1999 (Working Paper No. 1999/089; DOI: https://doi.org/10.5089/9781451851267.001).
Content in this bundle
- Trade in Financial Services and Capital Movements - WP/99/89