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dc.contributor.authorPrasad, Eswar S.en_US
dc.contributor.authorRajan, Raghuram G.en_US
dc.contributor.authorSubramanian, Arvinden_US
dc.date.accessioned2008-06-04en_US
dc.date.accessioned2010-07-07T11:24:11Z-
dc.date.available2010-07-07T11:24:11Z-
dc.date.issued2007en_US
dc.identifier.urihttp://hdl.handle.net/10419/34518-
dc.description.abstractWe document the recent phenomenon of uphill flows of capital from nonindustrial to industrial countries and analyze whether this pattern of capital flows has hurt growth in nonindustrial economies that export capital. Surprisingly, we find that there is a positive correlation between current account balances and growth among nonindustrial countries, implying that a reduced reliance on foreign capital is associated with higher growth. This result is weaker when we use panel data rather than cross-sectional averages over long periods of time, but in no case do we find any evidence that an increase in foreign capital inflows directly boosts growth. What explains these results, which are contrary to the predictions of conventional theoretical models? We provide some evidence that even successful developing countries have limited absorptive capacity for foreign resources, either because their financial markets are underdeveloped, or because their economies are prone to overvaluation caused by rapid capital inflows.en_US
dc.language.isoengen_US
dc.publisherIZA Bonnen_US
dc.relation.ispartofseriesIZA Discussion Papers 3186en_US
dc.subject.jelF3en_US
dc.subject.ddc330en_US
dc.subject.keywordNorth-South capital flowsen_US
dc.subject.keywordfinancial globalizationen_US
dc.subject.stwKapitalimporten_US
dc.subject.stwWirtschaftswachstumen_US
dc.subject.stwLeistungsbilanzen_US
dc.subject.stwEntwicklungsländeren_US
dc.subject.stwSchwellenländeren_US
dc.titleForeign capital and economic growthen_US
dc.typeWorking Paperen_US
dc.identifier.ppn55264496Xen_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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