Arbeitspapier
Capital flows: Catalyst or hindrance to economic takeoffs?
This paper applies a probit estimation to assess the relationship between economic takeoffs during 1950-2000 and inflows of portfolio debt, portfolio equity, and FDI, controlling for country's stock of short-term external debt and commodity terms of trade. Average level of FDI inflows is associated with a 23 percent higher takeoff probability relative to a zero FDI inflow benchmark, and this effect is highest for the Latin America subsample, with a 65 rise in takeoff probability. Higher stock of short term external debt has been associated with a substantial negative effect on the probability of a takeoff, and the effect of the short terms debt overhang is largest for Latin American countries. Yet, virtually all the takeoffs were associated with a rise in portfolio debt inflows. At the sample mean, inflow of portfolio debt is associated with approximately 25 percent higher probability of a takeoff. In contrast, a one standard deviation increase in equity outflows (inflows) is associated with a 47 percent (17 percent) decline in the probability of a takeoff. A one standard deviation improvement in commodity terms of trade is associated with 28 percent higher takeoff probability.
- Language
-
Englisch
- Bibliographic citation
-
Series: Working Paper ; No. 11-05
- Classification
-
Wirtschaft
Economic Integration
International Investment; Long-term Capital Movements
Financial Aspects of Economic Integration
Economic Growth of Open Economies
Economic Growth and Aggregate Productivity: General
- Subject
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Kapitalmobilität
Kapitalimport
Portfolio-Investition
Direktinvestition
Wirtschaftswachstum
Welt
- Event
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Geistige Schöpfung
- (who)
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Aizenman, Joshua
Sushko, Vladyslav
- Event
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Veröffentlichung
- (who)
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University of California, Santa Cruz Institute for International Economics (SCIIE)
- (where)
-
Santa Cruz, CA
- (when)
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2011
- Handle
- Last update
-
10.03.2025, 11:41 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Aizenman, Joshua
- Sushko, Vladyslav
- University of California, Santa Cruz Institute for International Economics (SCIIE)
Time of origin
- 2011
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