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Measuring and explaining the volatility of capital flows to emerging countries

Broto, Carmen and Díaz-Cassou, Javier and Erce, Aitor (2011) Measuring and explaining the volatility of capital flows to emerging countries. Journal of Banking and Finance, 35 (8). pp. 1941-1953. ISSN 0378-4266

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Abstract

This paper analyzes the determinants of the volatility of the various types of capital inflows into emerging countries. After calculating a proxy of the volatility of FDI, portfolio and bank inflows, we use a panel data model to study their relationship with a broad set of explanatory variables. Our results highlight the difficulties policy-makers face in stabilizing capital flows. Thus, we show that since 2000 global factors beyond the control of emerging economies have become increasingly significant relative to country-specific drivers. However, we identify some domestic macroeconomic and financial factors that appear to reduce the volatility of certain capital flows without increasing that of others.

Item Type: Article
Official URL: http://www.elsevier.com/wps/find/journaldescriptio...
Additional Information: © 2011 Elsevier
Subjects: H Social Sciences > HB Economic Theory
Sets: Departments > International Development
Collections > Economists Online
Identification Number: 10.1016/j.jbankfin.2011.01.004
Date Deposited: 27 Jun 2011 10:36
Last Modified: 04 May 2017 09:34
URI: http://eprints.lse.ac.uk/id/eprint/36885

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