Financial remoteness and the net external position

Martin Schmitz

No 1330, Working Paper Series from European Central Bank

Abstract: This paper shows that, controlling for standard determinants of net external positions, financially-remote countries exhibit more positive net external positions. This finding is found to be stronger for less advanced countries, hinting at external funding problems for more remote countries. Being located near financially very open countries, being in currency unions with creditor countries, or being highly integrated through financial and trade linkages with a ‘core’ country facilitates net external borrowing. Consequently, evidence is found for an important role of geographic and bilateral factors for a country’s net external wealth. JEL Classification: F21, F34, F41

Keywords: Cross-Border Investment; distance; net foreign assets; proximity (search for similar items in EconPapers)
Date: 2011-04
New Economics Papers: this item is included in nep-ifn and nep-opm
Note: 1865580
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Financial remoteness and the net external position (2014)
Working Paper: Financial Remoteness and the Net External Position (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20111330

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