Global Flow of Funds as a Network: Cross-Border Investment in G20

Nan Zhang () and Yiye Zhang ()
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Nan Zhang: Hiroshima Shudo University
Yiye Zhang: Cornell University

Chapter Chapter 2 in Global Flow of Funds Analysis, 2024, pp 61-133 from Springer

Abstract: Abstract This study measures global financial stability by constructing a global flow of funds (GFF) matrix model based on its inherent market mechanisms. We discuss the basic concept of GFF, integrate the data sources, establish a GFF statistical matrix, which can be used to evaluate the financial risks and influences among its members, and estimate bilateral exposures between countries for three different financial instruments within and across the G20 economies. Then, we use financial network analysis to construct the financial relationships between countries. Moreover, we employ the network theory to discuss an analytical method for the GFF and use countries in the G20 as the research sample to discuss the network centrality, mutual relationships, and the financial risk of foreign direct investment, portfolio investment, and cross-border bank credit among the United States, Japan, and China. This study establishes a GFF statistical matrix and introduces the network theory into the GFF analysis, which opens a new field for measuring and applying GFF.

Keywords: Global flow of funds; Data sources; Who-to-whom matrices; Financial networks (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-97-1029-4_2

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DOI: 10.1007/978-981-97-1029-4_2

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