Gross Capital Flows by Banks, Corporates and Sovereigns
98 Pages Posted: 30 Jan 2017 Last revised: 1 Mar 2023
There are 4 versions of this paper
Gross Capital Flows by Banks, Corporates, and Sovereigns
Gross Capital Flows by Banks, Corporates and Sovereigns
Gross Capital Flows by Banks, Corporates and Sovereigns
Gross Capital Inflows to Banks, Corporates and Sovereigns
Date Written: January 2017
Abstract
We construct a new quarterly data set of international capital flows broken down by sector: banks, corporates and sovereigns. Using our novel data set, we establish several key facts that demonstrate the importance of distinguishing in- and outflows by the domestic sectoral identity. We find that public sector flows may serve as a countervailing force to private sector flows, especially in emerging markets (EMs), as these flows respond differently not only to country-specific fundamentals but also to global shocks. The high inflow-outflow correlation observed in total capital flow data is driven by within-sector flows, especially those of AE banks. In general, inflows and outflows of AEs and inflows to EMs are primarily AE banks’ transactions, and, as a consequence, respond similarly to capital flow drivers. By contrast, EM outflows respond differently to global shocks and changes in fundamentals, leading to lower inflow-outflows correlations for EMs.
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