Structural Risks of Foreign Liabilities: Impact of Investment Income Repatriation in Emerging Economies

Rodionova, Tetiana

Structural Risks of Foreign Liabilities: Impact of Investment Income Repatriation in Emerging Economies

Tetiana Rodionova ()

Transition Studies Review, 2013, vol. 20, issue 2, 119-129

Abstract: This paper explores the structure of foreign liabilities, the extent of capital repatriation in the form of investment income of foreign investors and its impact in emerging markets. The concept “coverage ratio of foreign investment” is introduced, which is defined as the share of total income repatriated by foreign investors in the respective cumulative inflows of the financial account. The impact of foreign investors’ returns onto external imbalances in emerging economies is studied empirically. The tendency of growing role of the investment income balance in the formation of the current account balance reveals new threats for the emerging economies. Copyright CEEUN 2013

Keywords: Emerging markets; International investment position; Current account balance; Income from foreign investments; F21; F32; F34; O57 (search for similar items in EconPapers)
Date: 2013
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DOI: 10.1007/s11300-013-0274-6

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