Composition of International Capital Flows: A Survey
Hong Kong Institute for Monetary and Financial Research (HKIMR) Research Paper WP No. 14/2011
Published in "The Evidence and Impact of Financial Globalization", December 2012, Publisher: Academic Press, ISBN: 9780124058996
32 Pages Posted: 20 Jun 2011 Last revised: 22 Jul 2022
There are 3 versions of this paper
Composition of International Capital Flows: A Survey
Composition of International Capital Flows: A Survey
Composition of International Capital Flows: A Survey
Date Written: May 27, 2011
Abstract
This working paper was written by Koralai Kirabaeva (Bank of Canada) and Assaf Razin (Cornell University).
We survey several mechanisms that explain the composition of international capital flows: foreign direct investment, foreign portfolio investment and debt flows (bank loans and bonds). We focus on information frictions such as adverse selection and moral hazard, and exposure to liquidity shocks, and discuss the following implications for composition of capital flows: (1) home-court information advantage; (2) panic-based capital-flow reversals; (3) information-liquidity trade-off in the presence of source and host country liquidity shocks; (4) moral hazard in international debt contracts; and (5) risk sharing role of domestic bonds in the presence of home bias in goods and equities.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Composition Matters: Capital Inflows and Liquidity Crunch During a Global Economic Crisis
By Hui Tong and Shang-jin Wei
-
The Composition Matters: Capital Inflows and Liquidity Crunch During a Global Economic Crisis
By Hui Tong and Shang-jin Wei
-
The Composition Matters: Capital Inflows and Liquidity Crunch During a Global Economic Crisis
-
An Information-Based Trade Off between Foreign Direct Investment and Foreign Portfolio Investment
By Itay Goldstein and Assaf Razin
-
Do Some Forms of Financial Flows Help Protect from Sudden Stops?
By Andrei A. Levchenko and Paolo Mauro
-
The Cyclical Nature of North-South FDI Flows
By Eduardo Levy Levy-yeyati, Ugo Panizza, ...
-
The Cyclical Properties of Disaggregated Capital Flows
By Silvio Contessi, Pierangelo De Pace, ...
-
Liquidity, Institutional Quality and the Composition of International Equity Flows
By Itay Goldstein, Assaf Razin, ...
-
Liquidity, Institutional Quality and the Composition of International Equity Outflows
By Itay Goldstein, Assaf Razin, ...