EconPapers    
Economics at your fingertips  
 

Does Openness to International Financial Flows Raise Productivity Growth?

Eswar Prasad, Marco Terrones and Ayhan Kose

No 2008/242, IMF Working Papers from International Monetary Fund

Abstract: This paper provides a comprehensive analysis of the relationship between financial openness and total factor productivity (TFP) growth using an extensive dataset that includes various measures of productivity and financial openness for a large sample of countries. We find that de jure capital account openness has a robust positive effect on TFP growth. The effect of de facto financial integration on TFP growth is less clear, but this masks an important and novel result. We find strong evidence that FDI and portfolio equity liabilities boost TFP growth while external debt is actually negatively correlated with TFP growth. The negative relationship between external debt liabilities and TFP growth is attenuated in economies with higher levels of financial development and better institutions.

Keywords: WP; TFP growth; equity liability; debt liability; TFP calculation; TFP measure (search for similar items in EconPapers)
Pages: 39
Date: 2008-10-01
References: Add references at CitEc
Citations: View citations in EconPapers (43)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=22387 (application/pdf)

Related works:
Journal Article: Does openness to international financial flows raise productivity growth? (2009) Downloads
Working Paper: Does Openness to International Financial Flows Raise Productivity Growth? (2008) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2008/242

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi (amodi@imf.org).

 
Page updated 2025-01-02
Handle: RePEc:imf:imfwpa:2008/242