Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/109583
Authors: 
Mercado, Rogelio
Park, Cyn-Young
Year of Publication: 
2011
Series/Report no.: 
ADB Working Paper Series on Regional Economic Integration 84
Abstract: 
Understanding the determinants of capital inflows is essential to designing an effective policy framework to manage volatile capital flows and their disruptive potential. This paper aims to identify factors that explain the size and volatility of various types of capital flows to developing Asia with regard to other emerging market economies. The estimates for a panel dataset show that per capita income growth, trade openness, and change in stock market capitalization are important determinants of capital inflows to developing Asia. Trade openness increases the volatility of all types of capital inflows, while change in stock market capitalization, global liquidity growth, and institutional quality lowers the volatility. A regional factor plays an important role in determining the size and volatility of capital inflows in emerging Europe and merging Latin America, suggesting that regional economic cooperation and policy coordination may be an important element in designing a policy framework to manage capital inflows in merging economies.
Subjects: 
capital flows
volatility of capital flows
panel data
developing Asia
push and pull factors
JEL: 
F21
F32
F36
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/igo
Document Type: 
Working Paper

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