Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/64494
Authors: 
Aizenman, Joshua
Jinjarak, Yothin
Park, Donghyun
Year of Publication: 
2011
Series/Report no.: 
Working Papers, UC Santa Cruz Economics Department 692
Abstract: 
We investigate the relationship between economic growth and lagged international capital flows, disaggregated into FDI, portfolio investment, equity investment, and shortterm debt. We follow about 100 countries during 1990-2010 when emerging markets became more integrated into the international financial system. We look at the relationship both before and after the global crisis. Our study reveals a complex and mixed picture. The relationship between growth and lagged capital flows depends on the type of flows, economic structure, and global growth patterns. We find a large and robust relationship between FDI - both inflows and outflows - and growth. The relationship between growth and equity flows is smaller and less stable. Finally, the relationship between growth and short-term debt is nil before the crisis, and negative during the crisis.
Subjects: 
capital flows
economic growth
FDI
portfolio investment
equity investment
short-term debt
financial integration
financial crisis
JEL: 
F43
F21
F32
Document Type: 
Working Paper

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