FDI Mismatch, trade Mis-reporting, and hidden capital Movements: The USA - China case

Amit K. Biswas, Juergen von Hagen and Sandip Sarkar

Journal of International Money and Finance, 2022, vol. 120, issue C

Abstract: We analyze the differences between bilateral FDI and trade data reported by the US and by China for the period from 1983 to 2017. Such differences can be interpreted as hidden capital flows. We show that they are economically significant and analyze their dynamics using VAR and ARDL models. We find that hidden capital flows occur in both directions: from China to the US through the trade channel and from the US to China through the FDI channel. Only the latter respond to financial market conditions. In the long run, an increase in hidden capital outflows through the trade channel triggers a hidden capital inflow through the FDI channel.

Keywords: Trade mis-reporting; FDI; Capital flight; Generalized Impulse Response; ARDL (search for similar items in EconPapers)
JEL-codes: C32 F13 F14 F21 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0261560621001856
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:jimfin:v:120:y:2022:i:c:s0261560621001856

DOI: 10.1016/j.jimonfin.2021.102534

Access Statistics for this article

Journal of International Money and Finance is currently edited by J. R. Lothian

More articles in Journal of International Money and Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().