Patterns Of International Capital Flows And Productivity Growth: New Evidence

No 1345, Working Paper from Economics Department, Queen's University

Abstract: Recent 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.

Keywords: Gross capital flows; Net capital flows; Allocation puzzle; Productivity growth (search for similar items in EconPapers)
JEL-codes: F21 F41 F43 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2015-07
New Economics Papers: this item is included in nep-eff and nep-opm
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.econ.queensu.ca/sites/econ.queensu.ca/files/qed_wp_1345.pdf First version 2015 (application/pdf)

Related works:
Journal Article: Patterns of International Capital Flows and Productivity Growth: New Evidence (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:1345

Access Statistics for this paper

More papers in Working Paper from Economics Department, Queen's University Contact information at EDIRC.
Bibliographic data for series maintained by Mark Babcock ().