Portfolio Flows, Foreign Direct Investment, Crises
Merih Uctum () and
Remzi Uctum ()
No 224, Computing in Economics and Finance 2005 from Society for Computational Economics
The goal of the paper is to analyze how financial and economic crises affect the relation between capital flows and their determinants. We develop a model of foreign portfolio investment (FPI) and foreign direct investment (FDI), and apply it to Turkey using an endogenous break analysis and accounting for country risk. We identify two breakpoints that correspond to two crises dates. Our results show changes in the sign and/or coefficient of a number of determinants in both types of investment and thus suggest that analyses based on the assumption of parameter constancy may lead to misleading results.
Keywords: capital flows; crises; structural changes (search for similar items in EconPapers)
JEL-codes: F21 F32 F36 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:sce:scecf5:224
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