{
  "title": "Push Factors and Capital Flows to Emerging Markets: Why Knowing Your Lender Matters More Than Fundamentals",
  "publication": "IMF Working Papers, June 22, 2015",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/push-factors-and-capital-flows-to-emerging-markets-why-knowing-your-lender-matters-more-than-43015",
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  "summary": "This paper analyzes the behavior of gross capital inflows across 34 emerging markets (EMs). We first confirm that aggregate inflows to EMs co-move considerably.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Authors: Eugenio M Cerutti, Stijn Claessens, Damien Puy\n- Date: June 22, 2015\n- Scope: Analysis of gross capital inflows across 34 emerging markets (EMs).\n- Main objective: Examine aggregate co-movement of inflows, heterogeneity across asset types, drivers of common dynamics, and cross-country differences in sensitivity to those dynamics."
    },
    {
      "heading": "Key findings",
      "content": "- Aggregate co-movement\n  - Aggregate inflows to EMs co-move considerably.\n- Heterogeneity across asset types (finding (i))\n  - The aggregate co-movement conceals significant heterogeneity across asset types.\n  - Only bank-related and portfolio bond and equity inflows co-move.\n- Role of global push factors (finding (ii))\n  - Global push factors in advanced economies mostly explain the common dynamics in inflows.\n  - The relative importance of push factors varies by type of flow.\n- Cross-country sensitivity differences (finding (iii))\n  - Sensitivity to common dynamics varies significantly across borrower countries.\n  - Market structure characteristics — especially:\n    - the composition of the foreign investor base, and\n    - the level of liquidity\n    — rather than borrower country’s institutional fundamentals, strongly affect sensitivities.\n  - Countries relying more on international funds and global banks are found to be more sensitive to push factors."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Monitor lenders and investors\n  - Emerging markets need to closely monitor their lenders and investors to assess inflow exposures to global push factors.\n- Focus on market structure\n  - Policymakers should pay particular attention to the composition of the foreign investor base and liquidity conditions when assessing vulnerability to global push shocks.\n- Flow-type differentiation\n  - Risk assessment and policy responses should distinguish between flow types, given differing co-movement patterns and sensitivities."
    },
    {
      "heading": "Subjects and keywords (as listed by the source)",
      "content": "- Subjects: Balance of payments, Banking, Bonds, Capital flows, Capital inflows, Financial institutions, Financial markets, Stock markets, Stocks\n- Keywords: Africa, Asia and Pacific, bond flow, Bonds, capital flows, Capital inflows, emerging markets, equity, equity flow, equity inflow, Europe, Global, global banks, inflows to EMs, investor base, market characteristic, MSCI emerging market index, mutual funds, portfolio equity, Push factors, Stock markets, Stocks, WP\n\nSource: Push Factors and Capital Flows to Emerging Markets: Why Knowing Your Lender Matters More Than Fundamentals (IMF Working Paper), by Eugenio M Cerutti, Stijn Claessens, and Damien Puy, June 22, 2015.\n\n---\n\n Content in this bundle\n\n- wp15127\n  - wp15127 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp15127 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/push-factors-and-capital-flows-to-emerging-markets-why-knowing-your-lender-matters-more-than-43015"
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    "Authors: Eugenio M Cerutti, Stijn Claessens, Damien Puy",
    "Published: June 22, 2015",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513526638.001",
    "Authors: Eugenio M Cerutti, Stijn Claessens, Damien Puy",
    "Date: June 22, 2015",
    "Scope: Analysis of gross capital inflows across 34 emerging markets (EMs).",
    "Main objective: Examine aggregate co-movement of inflows, heterogeneity across asset types, drivers of common dynamics, and cross-country differences in sensitivity to those dynamics.",
    "Aggregate co-movement",
    "Heterogeneity across asset types (finding (i))",
    "Role of global push factors (finding (ii))",
    "Cross-country sensitivity differences (finding (iii))",
    "Monitor lenders and investors",
    "Focus on market structure",
    "Flow-type differentiation",
    "Subjects: Balance of payments, Banking, Bonds, Capital flows, Capital inflows, Financial institutions, Financial markets, Stock markets, Stocks",
    "Keywords: Africa, Asia and Pacific, bond flow, Bonds, capital flows, Capital inflows, emerging markets, equity, equity flow, equity inflow, Europe, Global, global banks, inflows to EMs, investor base, market characteristic, MSCI emerging market index, mutual funds, portfolio equity, Push factors, Stock markets, Stocks, WP",
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