Foreign Portfolio versus Foreign Direct Investment Flows: Are They So Different?

Ramkishen Rajan

Chapter 21 in Emerging Asia, 2011, pp 125-127 from Palgrave Macmillan

Abstract: Abstract Many emerging economies in Asia and elsewhere have been faced with sharply volatile capital flows, mainly driven by sharp booms and busts in foreign portfolio and short-term bank flows, together referred to as “mobile capital”. In contrast, FDI flows have remained remarkably stable (see Chapter 20). The policy focus on this “mobile capital” has tried to limit such flows via capital account restrictions or through prudential measures, or by ensuring that the central bank holds enough low-yielding liquid assets (i.e. foreign exchange reserves) to cover possible sudden withdrawals.

Keywords: Central Bank; Private Equity; Capital Flow; Mobile Capital; Liquid Asset (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-0-230-30627-1_21

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DOI: 10.1057/9780230306271_21

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