Cross-Border Portfolio Investment Inflows to Emerging Countries: Enhanced Dominance of Local Factors amid the COVID-19 Pandemic

Kei-Ichiro Inaba and Daisuke Maruyama ()
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Daisuke Maruyama: Hitotsubashi University Business School

Review of Development Finance Journal, 2022, vol. 12, issue 2, 18-26

Abstract: Analysing the determinants of cross-border portfolio investment inflows to 17 emerging countries in 2012–2020, this study supports a global financial cycle hypothesis stressing the dominant role played by global factors in those inflows. In the amid- COVID-19 period of 2020, such dominance decreased mainly through global real business factors. The relative dominance of local factors increased then. Increases of short-term interest rates and mitigations of sovereign risks in the countries were more greatly associated with discouraging global investors from selling local securities in the pandemic period than before.

Keywords: Global financial cycle; cross-border portfolio investment; emerging markets finance; monetary policy; COVID-19 pandemic (search for similar items in EconPapers)
JEL-codes: F3 G1 O1 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:afj:journ3:v:12:y:2022:i:2:p:18-26

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