Capital Flow Dynamics in Emerging Market Economies

Masahiro Enya, Akira Kohsaka and Kimiko Sugimoto
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Kimiko Sugimoto: Hirao School of Management, Konan University

No 19E011, OSIPP Discussion Paper from Osaka School of International Public Policy, Osaka University

Abstract: This paper analyzes the dynamics of gross capital flows since the 1990s across three regions, i.e. East Asia, Europe and Latin America, and across types of capital flows, i.e. foreign direct investment, portfolio equity flows, portfolio debt flows and other investment. First, we demonstrate distinct features of gross capital inflows and outflows with selected EMs across the three regions by types of capital flows. Then, using panel data regression in the period of 2000-2015, we show how both domestic and global factors contribute to the dynamics of these gross capital flows. We confirm that both global factors such as expected growth and international investors’ risk perception in AEs, and domestic factors such as exchange rate regimes, and financial deepening in EMs, contribute to the dynamics. Furthermore, we detect significant regional diversities in relative importance and sensitivities in the roles of these factors.

Keywords: gross capital flows; emerging market economies (EMs); types of capital flows; Asian Financial Crisis; Global Financial Crisis (search for similar items in EconPapers)
JEL-codes: F3 F4 F6 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2019-11
New Economics Papers: this item is included in nep-ifn, nep-opm and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:osp:wpaper:19e011

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