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Ride the Wild Surf: An Investigation of the Drivers of Surges in Capital Inflows

2014; Linguagem: Inglês

10.1596/1813-9450-6753

1813-9450

César Calderón, Megumi Kubota,

International Development and Aid

No AccessPolicy Research Working Papers4 Feb 2014Ride the Wild Surf: An Investigation of the Drivers of Surges in Capital InflowsAuthors/Editors: César Calderón, Megumi KubotaCésar Calderón, Megumi Kubotahttps://doi.org/10.1596/1813-9450-6753SectionsAboutPDF (1.1 MB) ToolsAdd to favoritesDownload CitationsTrack Citations ShareFacebookTwitterLinked In Abstract: Over the past 15 years, gross inflows to industrial and developing countries have enjoyed a wild ride. After reaching record highs in the run-up to the global financial crisis, they collapsed dramatically in 2008–09. As signs of global recovery reappeared, capital inflows resumed although at different speeds. The recovery in flows was faster and sharper in developing countries. This paper aims at understanding the (domestic and external) drivers of these surges in gross inflows using quarterly data for 67 countries from 1975 to 2010. It finds that domestic and external factors have significant explanatory power in driving surges of inflows. This finding holds for the sample of industrial countries whereas domestic factors play a significantly larger role in explaining surges to developing countries. Zooming into the findings shows that: (a) financial booms tend to attract massive capital inflows, (b) surges to either industrial or developing countries are driven by regional contagion, and (c) strong growth and natural resource abundance are keys to attract inflows of foreign capital into developing countries. Previous bookNext book FiguresReferencesRecommendedDetailsCited ByRide the Wild Surf: An investigation of the drivers of surges in capital inflowsJournal of International Money and Finance, Vol.92Surges of international fund flowsJournal of International Money and Finance, Vol.82 View Published: January 2014 Copyright & Permissions Related TopicsMacroeconomics and Economic GrowthPrivate Sector DevelopmentFinance and Financial Sector Development KeywordsGROSS CAPITAL FLOWSSURGES PDF DownloadLoading ...