On the determinants of net international portfolio flows: A global perspective

Roberto De Santis () and Melanie Lührmann

Journal of International Money and Finance, 2009, vol. 28, issue 5, 880-901

Abstract: In a panel covering a large number of countries from 1970 to 2003, we show that population ageing, institutions, money and deviations from the Uncovered Interest Parity (UIP) influence developments in net capital flows. Population ageing is associated with net equity inflows, net outflows in debt instruments and current account deficits. Better institutions favor net capital inflows. Higher money to GDP ratio - associated with lower interest rates - enhances international investments in domestic stocks to the detriment of the less attractive domestic bonds. As for the deviations from the UIP, a rise in the short-term domestic interest rate above its trend brings about an equilibrating portfolio shift away from domestic debt instruments.

Keywords: Net; portfolio; flows; Current; accounts; Panel; regressions (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0261-5606(08)00141-1
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:28:y:2009:i:5:p:880-901

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 ().