Financial, institutional, and macroeconomic determinants of cross-country portfolio equity flows: The case of developed countries

Antonio Afonso, José Alves, Krzysztof Beck and Karen Jackson

Economic Modelling, 2024, vol. 141, issue C

Abstract: This paper examines the determinants of financial equity flows to investigate the role played by business cycles, government debt and sovereign rating scores, and whether the impact depends on the magnitude and direction of the flows. Using a new, richer dataset of flows among developed countries over 2001–2018, our key findings are as follows: (i) equity flows are more intense among countries at the same stage of the business cycle (ii) equity flows are higher to countries with a relatively lower debt to GDP ratio (iii) financial and macroeconomic variables are important for big equity flows, while institutional variables are important for the small flows. Overall, considering a wider range of factors under-explored in the literature, we provide a stronger understanding of the development of risks in the financial sector as well as the linkages with other sectors of the economy.

Keywords: OECD countries; Business cycle; Sovereign ratings; Government debt; Semi-parametric regressions; Quantile regressions (search for similar items in EconPapers)
JEL-codes: G15 G24 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264999324002591
Full text for ScienceDirect subscribers only

Related works:
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:eee:ecmode:v:141:y:2024:i:c:s0264999324002591

DOI: 10.1016/j.econmod.2024.106902

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().