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International Financial Integration and Economic Growth: New Evidence on Threshold Effects

Jinzhao Chen and Thérèse Quang ()

No 2012-6, EconomiX Working Papers from University of Paris Nanterre, EconomiX

Abstract: Recent research highlights that countries differ with respect to their experience with capital flows and do not systematically gain from capital account liberalization. This paper is related to the empirical literature that investigates the particular conditions under which international financial integration (IFI) is growth-enhancing. Relying on non-linear panel techniques, we find that countries that are able to reap the benefits of IFI satisfy certain threshold conditions regarding the level of economic, institutional and financial development, and the inflation rate. Our results also reveal a differentiated behaviour of foreign direct investment and portfolio liabilities compared to debt liabilities.

Keywords: international financial integration; economic growth; panel threshold regression model (search for similar items in EconPapers)
JEL-codes: F3 F4 O4 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2012
New Economics Papers: this item is included in nep-cba and nep-fdg
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Related works:
Journal Article: The impact of international financial integration on economic growth: New evidence on threshold effects (2014) Downloads
Working Paper: International Financial Integration and Economic Growth: New Evidence on Threshold Effects (2012) Downloads
Working Paper: International Financial Integration and Economic Growth: New Evidence on Threshold Effects (2012) Downloads
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