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Capital Flow Dynamics in Emerging Market Economies

Author

Listed:
  • Masahiro Enya

    (Faculty of Economics and Management, Institute of Human and Social Sciences, Kanazawa University)

  • Akira Kohsaka

    (Osaka School of International Public Policy, Osaka University)

  • Kimiko Sugimoto

    (Hirao School of Management, Konan 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.

Suggested Citation

  • Masahiro Enya & Akira Kohsaka & Kimiko Sugimoto, 2019. "Capital Flow Dynamics in Emerging Market Economies," OSIPP Discussion Paper 19E011, Osaka School of International Public Policy, Osaka University.
    • Handle: RePEc:osp:wpaper:19e011
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    References listed on IDEAS

    as
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    6. Koepke, Robin, 2014. "Fed Policy Expectations and Portfolio Flows to Emerging Markets," MPRA Paper 63519, University Library of Munich, Germany, revised 07 Apr 2015.
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    8. Kristin J. Forbes & Francis E. Warnock, 2014. "Debt-and Equity-Led Capital Flow Episodes," Central Banking, Analysis, and Economic Policies Book Series, in: Miguel Fuentes D. & Claudio E. Raddatz & Carmen M. Reinhart (ed.),Capital Mobility and Monetary Policy, edition 1, volume 18, chapter 9, pages 291-322, Central Bank of Chile.
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    Cited by:

    1. Kumar, Virender & Dua, Pami, 2024. "What explains foreign portfolio investment inflows to BRICS countries?," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 32-46.

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    More about this item

    Keywords

    gross capital flows; emerging market economies (EMs); types of capital flows; Asian Financial Crisis; Global Financial Crisis;
    All these keywords.

    JEL classification:

    • F3 - International Economics - - International Finance
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F6 - International Economics - - Economic Impacts of Globalization

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