journal article Oct 20, 2015

Patterns of International Capital Flows and Productivity Growth: New Evidence

Review of International Economics Vol. 23 No. 5 pp. 846-872 · Wiley
View at Publisher Save 10.1111/roie.12191
Abstract
AbstractRecent evidence from developing and emerging economies shows a negative correlation between growth and net capital inflows, a contradiction to neoclassical growth theory. I provide updated and disaggregated evidence on the origins of this puzzle. An analysis of the components of capital flows and of gross portfolio positions shows that foreign direct investment is directed towards countries with the highest growth rates, but that portfolio investment outflows exceed these inflows. Liberalized capital accounts further exacerbate this pattern. My results suggest a desire for international portfolio diversification in liquid assets by fast‐growing countries lies at the heart of the puzzle.
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Metrics
10
Citations
41
References
Details
Published
Oct 20, 2015
Vol/Issue
23(5)
Pages
846-872
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Cite This Article
Margaux MacDonald (2015). Patterns of International Capital Flows and Productivity Growth: New Evidence. Review of International Economics, 23(5), 846-872. https://doi.org/10.1111/roie.12191
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