Non-financial corporations from emerging market economies and capital flows

Stefan Avdjiev, Michael Chui and Hyun Song Shin

BIS Quarterly Review, 2014

Abstract: Non-financial corporations from emerging market economies (EMEs) have increased their external borrowing significantly through the offshore issuance of debt securities. Having obtained funds abroad, the foreign affiliate of a non-financial corporation could transfer funds to its home country via three channels: it could lend directly to its headquarters (within-company flows), extend credit to unrelated companies (between-company flows) or make a cross-border deposit in a bank (corporate deposit flows). Cross-border capital flows to EMEs associated with all three of the above channels have grown considerably over the past few years, as balance of payments data reveal. To the extent that these flows are driven by financial operations rather than real activities, they could give rise to financial stability concerns.

JEL-codes: D21 F31 G32 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (82)

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