Private Capital Flows to Low Income Countries: Country-Specific Effects and the Lucas Paradox

Corine Franken and Sweder van Wijnbergen
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Corine Franken: University of Amsterdam

No 10-003/2, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: This paper analyses Net Private Capital Flows to LICs incorporating the recent surge in FDI between 2000 and 2006. We show that including country-specific effects in a paneldata setup resolves the Lucas Paradox, at least for LICs. Our results suggest that openness is among the most important factors explaining country-specific performance in attracting Net Private Capital Flows.

Keywords: Private capital inflows; Low Income Countries; Lucas Paradox (search for similar items in EconPapers)
JEL-codes: F21 G15 (search for similar items in EconPapers)
Date: 2010-01-13
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20100003

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