Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/264963 
Year of Publication: 
2021
Series/Report no.: 
Working Paper No. 2122
Publisher: 
Koç University-TÜSIAD Economic Research Forum (ERF), Istanbul
Abstract: 
Cross-border capital flows are expected to lead to increased international risk sharing by facilitating borrowing and lending in global financial markets. This paper examines risk-sharing outcomes of various types of capital flows (foreign direct investment, portfolio equity, debt, remittance, and aid flows) in a large sample of emerging market and developing economies. The results suggest that remittances and aid flows are associated with increased international risk sharing. Other types of capital flows are not consistently correlated with better risk-sharing outcomes. These findings are robust to the use of different econometric specifications, country-specific characteristics, and other controls.
Subjects: 
capital flows
remittances
aid flows
international risk sharing
JEL: 
E1
F02
F4
G01
Document Type: 
Working Paper

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