Expectations, sentiments and capital flows to emerging market economies

Joscha Beckmann, Tjeerd Boonman and Sven Schreiber

Emerging Markets Review, 2024, vol. 62, issue C

Abstract: This paper provides a novel look at capital flow determinants by assessing the role of expectations and media sentiments. Analyzing eight emerging market economies, we assess the effects of macroeconomic expectations and disagreement among professionals and various media-based sentiment indicators. Our results show that survey and sentiment indicators which are available in real time contain useful information about capital flow dynamics which go beyond the effects of conventional push and pull factors for all countries we analyze. News sentiment related to the exchange rate have the strongest effects on capital flows. Finally, we identify substantial heterogeneity across countries.

Keywords: Portfolio capital inflows; Analyst forecasts; News sentiments; Dispersion; Emerging market economies (search for similar items in EconPapers)
JEL-codes: C11 F32 G15 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:62:y:2024:i:c:s1566014124000670

DOI: 10.1016/j.ememar.2024.101172

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