Does Inflation Targeting Matter for Foreign Portfolio Investment: Evidence from Propensity Score Matching

Adel Boughrara and Ichrak Dridi
Additional contact information
Adel Boughrara and Ichrak Dridi: LaREMFiQ Laboratory, High Institute of Commercial Studies (IHEC), University of Sousse

Journal of Economic Development, 2017, vol. 42, issue 2, 67-86

Abstract: The aim of this paper is twofold. Firstly, it seeks to investigate the nature of the relationship between inflation targeting (hereafter, IT) regime and foreign portfolio investment (hereafter, FPI) inflows. Secondly, it inquires whether IT is able to control for FPI volatility in emerging countries or not. The sample covers the period 1986-2010 and contains 38 emerging countries, of which 13 countries have adopted IT. By addressing the self-selection bias associated to the adoption of IT via a variety of propensity score matching techniques, the paper results show that the adoption of a full-fledged IT increases FPI inflows into emerging countries, but they show no robust results for containing FPI volatility.

Keywords: Inflation Targeting; Propensity Score Matching; Portfolio Investment; Emerging Market Countries (search for similar items in EconPapers)
JEL-codes: E42 E52 E58 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://jed.or.kr/full-text/42-2/5.pdf (application/pdf)

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:jed:journl:v:42:y:2017:i:2:p:67-86

Access Statistics for this article

Journal of Economic Development is currently edited by Sung Y. Park

More articles in Journal of Economic Development from Chung-Ang Unviersity, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Sung Y. Park ().