The interaction effects of financial openness and institutions on international capital flows

Keisuke Okada

Journal of Macroeconomics, 2013, vol. 35, issue C, 131-143

Abstract: This paper examines how financial openness and institutional quality affect international capital inflows, using data of 112 countries from 1985 to 2009. Our main findings are twofold. First, while financial openness and institutional quality do not individually have a significant impact on international capital inflows, their interaction effects are significant. More specifically, the partial effect of financial openness on international capital inflows is increasing in the level of institutional quality. Second, among institutional factors, bureaucratic quality and law and order play an important role in foreign direct investment.

Keywords: Foreign direct investment; Capital controls; Institutional quality (search for similar items in EconPapers)
JEL-codes: F21 F34 G28 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (46)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0164070412001103
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:jmacro:v:35:y:2013:i:c:p:131-143

DOI: 10.1016/j.jmacro.2012.11.003

Access Statistics for this article

Journal of Macroeconomics is currently edited by Douglas McMillin and Theodore Palivos

More articles in Journal of Macroeconomics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().