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Time-Series Econometrics of the Real and Financial Effects of Capital Flows: Selected Cases in Africa and Southern Asia

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  • J Benson Durham

Abstract

Few studies address the real effects of international capital flows. Instead of a cross-sectional design, this study exclusively examines time-series data from nine countries. Four cases - Nigeria, Zimbabwe, India, and Pakistan - produce evidence that either FDI or FPI adversely affect growth or savings rates, while two cases produce some evidence of a benevolent effect - Uganda and Sri Lanka. The data for Kenya, Zambia, and Bangladesh largely produce ambiguous results, and in fact, the vast majority of models across all cases indicate no significant relation. The preponderance of negative effects is largely consistent with the notion that lower income countries lack sufficient 'absorptive capacity' to harness foreign investment.

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  • J Benson Durham, "undated". "Time-Series Econometrics of the Real and Financial Effects of Capital Flows: Selected Cases in Africa and Southern Asia," QEH Working Papers qehwps56, Queen Elizabeth House, University of Oxford.
    • Handle: RePEc:qeh:qehwps:qehwps56
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    References listed on IDEAS

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    Cited by:

    1. Mebratu Seyoum & Renshui Wu & Jihong Lin, 2015. "Foreign Direct Investment and Economic Growth: The Case of Developing African Economies," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 122(1), pages 45-64, May.
    2. Carike Claassen & Elsabé Loots & Henri Bezuidenhout, 2011. "Chinese Foreign Direct Investment in Africa," Working Papers 261, Economic Research Southern Africa.

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