{
  "title": "Opening Up: Capital Flows and Financial Sector Dynamics in Low-Income Developing Countries",
  "publication": "IMF Working Papers, September 24, 2021",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2021/09/24/opening-up-capital-flows-and-financial-sector-dynamics-in-low-income-developing-countries-465828",
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  "summary": "Over the past two decades, many low-income developing countries have substantially increased openness towards external financing and have received large capital inflows.",
  "sections": [
    {
      "heading": "Key findings",
      "content": "- Over the past two decades, many low-income developing countries have substantially increased openness towards external financing and have received large capital inflows.\n- Capital inflows have been associated with financial deepening through increases in:\n  - bank loans,\n  - deposits,\n  - wholesale funding.\n- Domestic banks increase loans more than foreign banks.\n- There are only modest signs of a build-up in financial vulnerabilities.\n- Evidence points toward limited global push effects and highlights the importance of domestic pull factors."
    },
    {
      "heading": "Methodology and identification",
      "content": "- Analysis uses bank-level micro data.\n- Causality is examined through:\n  - an instrumental variable approach,\n  - an augmented inverse-probability weighting estimator."
    },
    {
      "heading": "Subject tags and scope",
      "content": "- Subjects: Balance of payments; Capital flows; Capital inflows; Economic and financial statistics; Financial institutions; Financial sector policy and analysis; Financial sector risk; Financial statistics; Loans.\n- Keywords: bank characteristic; Capital flows; Capital inflows; Commonwealth and Development Office; Financial sector risk; Financial statistics; Global; Loans; low-income developing countries; micro data; research project; U.K.'s Foreign.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2021/09/24/opening-up-capital-flows-and-financial-sector-dynamics-in-low-income-developing-countries-465828"
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    "Authors: Sebastian Horn, Futoshi Narita",
    "Published: September 24, 2021",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513597720.001",
    "Over the past two decades, many low-income developing countries have substantially increased openness towards external financing and have received large capital inflows.",
    "Capital inflows have been associated with financial deepening through increases in:",
    "Domestic banks increase loans more than foreign banks.",
    "There are only modest signs of a build-up in financial vulnerabilities.",
    "Evidence points toward limited global push effects and highlights the importance of domestic pull factors.",
    "Analysis uses bank-level micro data.",
    "Causality is examined through:",
    "Subjects: Balance of payments; Capital flows; Capital inflows; Economic and financial statistics; Financial institutions; Financial sector policy and analysis; Financial sector risk; Financial statistics; Loans.",
    "Keywords: bank characteristic; Capital flows; Capital inflows; Commonwealth and Development Office; Financial sector risk; Financial statistics; Global; Loans; low-income developing countries; micro data; research project; U.K.'s Foreign.",
    "**Working Paper**"
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