Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/34518 
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dc.contributor.authorPrasad, Eswar S.en
dc.contributor.authorRajan, Raghuram G.en
dc.contributor.authorSubramanian, Arvinden
dc.date.accessioned2008-06-04-
dc.date.accessioned2010-07-07T11:24:11Z-
dc.date.available2010-07-07T11:24:11Z-
dc.date.issued2007-
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
dc.language.isoengen
dc.publisher|aInstitute for the Study of Labor (IZA) |cBonnen
dc.relation.ispartofseries|aIZA Discussion Papers |x3186en
dc.subject.jelF3en
dc.subject.ddc330en
dc.subject.keywordNorth-South capital flowsen
dc.subject.keywordfinancial globalizationen
dc.subject.stwKapitalimporten
dc.subject.stwWirtschaftswachstumen
dc.subject.stwLeistungsbilanzen
dc.subject.stwEntwicklungsländeren
dc.subject.stwSchwellenländeren
dc.titleForeign capital and economic growth-
dc.type|aWorking Paperen
dc.identifier.ppn55264496Xen
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

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