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Medium-Term Determinants of International Investment Positions: The Role of Structural Policies

Author

Listed:
  • Davide Furceri

    (OECD)

  • Stéphanie Guichard

    (OECD)

  • Elena Rusticelli

    (OECD)

Abstract

This paper provides an empirical investigation of the medium-term determinants of international investment positions for a large sample of advanced and emerging economies. In addition to the usually considered drivers of foreign assets and liabilities, the analysis focuses on the role of structural policy indicators. Using cross-section and panel regression techniques the results suggest that structural policy settings are important long-term drivers of capital flows, having a relatively large impact on gross and net foreign capital positions and on their composition. In particular, the results suggest that certain kinds of structural policy reform could help to narrow global imbalances, and to modify the composition of international capital flows towards more stable and productive sources. Déterminants à moyen terme des positions étrangères extérieures : le rôle des politiques structurelles Cet article présente une étude empirique des déterminants à moyen terme de positions de l'investissement international pour un large échantillon des économies avancées et émergentes. En plus des déterminants usuels des engagements et actifs internationaux, l'analyse met l'accent sur le rôle des indicateurs structurels. Les résultats des régressions en coupe transversale et en panel suggèrent que les politiques structurelles en place sont d'importants moteurs à long terme des flux de capitaux, ayant un impact relativement important sur les positions extérieures brutes et nettes et sur leur composition. En particulier, les résultats suggèrent que certains types de réforme des politiques structurelles pourraient aider à réduire les déséquilibres mondiaux et á modifier la composition des flux de capitaux vers des sources plus stables et plus productives.

Suggested Citation

  • Davide Furceri & Stéphanie Guichard & Elena Rusticelli, 2011. "Medium-Term Determinants of International Investment Positions: The Role of Structural Policies," OECD Economics Department Working Papers 863, OECD Publishing.
    • Handle: RePEc:oec:ecoaaa:863-en
    DOI: 10.1787/5kgc9kzsm19x-en
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    Cited by:

    1. Joyce, Joseph P., 2019. "Partners, not debtors: The external liabilities of emerging market economies," Journal of Economic Behavior & Organization, Elsevier, vol. 157(C), pages 320-337.
    2. Turrini, Alessandro & Zeugner, Stefan, 2019. "Benchmarks for net international investment positions," Journal of International Money and Finance, Elsevier, vol. 95(C), pages 149-164.
    3. Stanley Fischer, 2015. "The Federal Reserve and the Global Economy : a speech at the conference held in honor of Professor Haim Ben-Shahar, former president of Tel Aviv University, Tel Aviv University, Tel Aviv, Israel, May ," Speech 852, Board of Governors of the Federal Reserve System (U.S.).
    4. Furceri, Davide & Guichard, Stéphanie & Rusticelli, Elena, 2012. "The effect of episodes of large capital inflows on domestic credit," The North American Journal of Economics and Finance, Elsevier, vol. 23(3), pages 325-344.
    5. Ibrahim D. Raheem & Sara le Roux & Simplice A. Asongu, 2019. "The Role of Asymmetry and Uncertainties in the Capital Flows- Economic Growth Nexus," Research Africa Network Working Papers 19/047, Research Africa Network (RAN).
    6. Dong He & Lillian Cheung & Wenlang Zhang & Tommy Wu, 2012. "How would Capital Account Liberalization Affect China's Capital Flows and the Renminbi Real Exchange Rates?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 20(6), pages 29-54, November.
    7. GANIĆ Mehmed, 2020. "Are Determinants Of International Financial Integration In The European Transition Countries Different From Post-Transition Countries?," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 15(1), pages 40-54, April.
    8. Davide Furceri & Stéphanie Guichard & Elena Rusticelli, 2011. "Episodes of Large Capital Inflows and the Likelihood of Banking and Currency Crises and Sudden Stops," OECD Economics Department Working Papers 865, OECD Publishing.
    9. Stefan Huemer & Beatrice Scheubel & Florian Walch, 2013. "Measuring Institutional Competitiveness in Europe," CESifo Economic Studies, CESifo Group, vol. 59(3), pages 576-608, September.
    10. Davide Furceri & Stéphanie Guichard & Elena Rusticelli, 2012. "Episodes of Large Capital Inflows, Banking and Currency Crises, and Sudden Stops," International Finance, Wiley Blackwell, vol. 15(1), pages 1-35, April.
    11. Zorell, Nico, 2017. "Large net foreign liabilities of euro area countries," Occasional Paper Series 198, European Central Bank.
    12. Gheorghe Hurduzeu & Maria-Isadora Lazar, 2015. "An Analysis of Economic Growth, Competitiveness and Macroeconomic Imbalances in the European Union," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 18(57), pages 37-50, September.
    13. Gabriela Contreras & Francisco Pinto, 2014. "Vulnerability to Changes in External Financing Due to Global Factors," Working Papers Central Bank of Chile 734, Central Bank of Chile.
    14. Stanley Fischer, 2014. "The Federal Reserve and the Global Economy : a speech at the Per Jacobsson Foundation Lecture, 2014 Annual Meetings of the International Monetary Fund and the World Bank Group, Washington, D.C., Octob," Speech 820, Board of Governors of the Federal Reserve System (U.S.).
    15. Saif Al-Abri, Almukhtar, 2014. "How does terms-of-trade behavior shape international financial integration in primary-commodity exporting economies?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 33(C), pages 335-353.
    16. Zsolt Darvas, 2012. "Intra-euro rebalancing is inevitable but insufficient," Policy Contributions 747, Bruegel.

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    More about this item

    Keywords

    capital flows; déséquilibres mondiaux; flux des capitaux; global imbalances; politique structurelle; structural policy;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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