Ride the Wild Surf : An Investigation of the Drivers of Surges in Capital Inflows
Over the past 15 years, gross inflows to industrial and developing countries have enjoyed a wild ride. After reaching record highs in the run-up to the global financial crisis, they collapsed dramatically in 2008-09. As signs of global recovery rea...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2014/01/18834369/ride-wild-surf-investigation-drivers-surges-capital-inflows http://hdl.handle.net/10986/16824 |
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okr-10986-16824 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTING ADVANCED COUNTRIES ADVANCED ECONOMIES ASSET POSITION ASSET PRICE ASSET PRICES ASYMMETRIC INFORMATION BALANCE OF PAYMENTS BALANCE SHEETS BANK POLICY BANKING CRISES BANKING CRISIS BOND BOND FUNDS BONDS BOOM-BUST CYCLES BROKERS CAPITAL ACCOUNT CAPITAL FLOW CAPITAL FLOWS CAPITAL INFLOW CAPITAL INFLOWS CAPITAL MOBILITY CAPITAL MOVEMENTS CENTRAL BANK CENTRAL BANKS COMMODITY COMMODITY PRICES CONSUMER PRICE INDEX COUNTRY RISK CREDIT EXPANSION CREDIT EXPANSIONS CREDIT GROWTH CREDIT MARKETS CREDITWORTHINESS CURRENCY CURRENCY CRISIS CURRENT ACCOUNT BALANCE CURRENT ACCOUNT BALANCES CURRENT ACCOUNT DEFICIT CURRENT ACCOUNT DEFICITS CURRENT ACCOUNT SURPLUSES DEBT DEBT CRISIS DEBT FLOWS DEBT RELIEF DEBT SECURITIES DEVALUATION DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPMENT BANK DOMESTIC CREDIT DOMESTIC CURRENCIES DOMESTIC CURRENCY DOMESTIC ECONOMY DOMESTIC FINANCIAL MARKETS DOMESTIC INVESTORS DOMESTIC MARKETS DUMMY VARIABLE EMERGING ECONOMIES EMERGING ECONOMY EMERGING MARKET EMERGING MARKET ECONOMIES EMERGING MARKETS EQUITY FLOWS EQUITY FUNDS EQUITY SECURITIES EXCESS LIQUIDITY EXCHANGE RATE EXCHANGE RATE REGIME EXCHANGE RATES EXPORTERS EXTERNAL FINANCE EXTERNAL FINANCING FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL ASSET FINANCIAL CONTAGION FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENTS FINANCIAL FACTORS FINANCIAL FLOWS FINANCIAL INFLOWS FINANCIAL INSTABILITY FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL MARKETS FINANCIAL OPENNESS FINANCIAL REFORM FINANCIAL SECTOR FINANCIAL STABILITY FINANCIAL SUPPORT FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCIAL TRANSACTIONS FISCAL POLICIES FLEXIBLE EXCHANGE RATE FLEXIBLE EXCHANGE RATE REGIMES FLOATING RATES FLOW OF CAPITAL FLOW OF FUNDS FOREIGN ASSET FOREIGN ASSET POSITION FOREIGN ASSETS FOREIGN CAPITAL FOREIGN DEBT FOREIGN DIRECT INVESTMENT FOREIGN FINANCING FOREIGN INTEREST FOREIGN INVESTMENT FOREIGN INVESTORS GLOBAL CAPITAL GLOBAL CAPITAL FLOWS GLOBAL ECONOMY GLOBAL MARKETS GLOBAL RISK GLOBAL STOCK MARKETS GLOBALIZATION GOVERNMENT POLICIES GROWTH RATE HUMAN RESOURCE IMPLIED VOLATILITY INCOME INCOME DIFFERENTIALS INDUSTRIAL COUNTRIES INFLATION INFLATION CRISIS INFLATION RATE INFLOWS OF CAPITAL INTEREST RATE INTERNATIONAL BANK INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL FLOWS INTERNATIONAL CAPITAL MARKET INTERNATIONAL ECONOMICS INTERNATIONAL FINANCIAL INTEGRATION INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL INTEREST INTERNATIONAL TRADE INVESTMENT FLOWS INVESTMENT OPPORTUNITIES LIABILITY LIQUIDITY LIQUIDITY PROBLEMS LOAN LOCAL CURRENCIES LOCAL CURRENCY LOCAL INVESTORS MACROECONOMIC INSTABILITY MACROECONOMIC POLICY MARKET RETURN MATURITY MATURITY MISMATCHES MICRO DATA MIDDLE-INCOME COUNTRIES MONETARY AUTHORITY MONETARY POLICY MONETARY STABILITY MONEY MARKET MONEY MARKET RATE MUTUAL FUNDS NATURAL RESOURCE NATURAL RESOURCES NEGATIVE SHOCK NET CAPITAL NET DEBT OPEN ECONOMIES OUTPUT POLICY RESPONSES PORTFOLIO PORTFOLIO INFLOWS PORTFOLIO INVESTMENT PORTFOLIO RISK PORTFOLIOS POSITIVE COEFFICIENT PRIVATE CAPITAL PRIVATE CAPITAL INFLOWS PROPERTY RIGHTS PUSH FACTOR PUSH FACTORS RAPID EXPANSION REAL ECONOMIC ACTIVITY REAL EXCHANGE RATE REAL EXCHANGE RATES REAL INTEREST REAL INTEREST RATE REAL INTEREST RATES REGULATORY FRAMEWORK RESERVE RETURN RETURNS RISK AVERSION SHARE OF EQUITY SHORT-TERM LIABILITIES SOVEREIGN DEFAULT SOVEREIGN RISK STOCK MARKET STOCK MARKET VOLATILITY STOCK MARKETS STOCK RETURN STOCK RETURNS SYSTEMIC RISKS TAX TAX CODE TRADE BALANCE TRADING WORLD DEVELOPMENT INDICATORS WORLD ECONOMY WORLD FINANCIAL MARKETS WORLD STOCK MARKETS |
| spellingShingle |
ACCOUNTING ADVANCED COUNTRIES ADVANCED ECONOMIES ASSET POSITION ASSET PRICE ASSET PRICES ASYMMETRIC INFORMATION BALANCE OF PAYMENTS BALANCE SHEETS BANK POLICY BANKING CRISES BANKING CRISIS BOND BOND FUNDS BONDS BOOM-BUST CYCLES BROKERS CAPITAL ACCOUNT CAPITAL FLOW CAPITAL FLOWS CAPITAL INFLOW CAPITAL INFLOWS CAPITAL MOBILITY CAPITAL MOVEMENTS CENTRAL BANK CENTRAL BANKS COMMODITY COMMODITY PRICES CONSUMER PRICE INDEX COUNTRY RISK CREDIT EXPANSION CREDIT EXPANSIONS CREDIT GROWTH CREDIT MARKETS CREDITWORTHINESS CURRENCY CURRENCY CRISIS CURRENT ACCOUNT BALANCE CURRENT ACCOUNT BALANCES CURRENT ACCOUNT DEFICIT CURRENT ACCOUNT DEFICITS CURRENT ACCOUNT SURPLUSES DEBT DEBT CRISIS DEBT FLOWS DEBT RELIEF DEBT SECURITIES DEVALUATION DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPMENT BANK DOMESTIC CREDIT DOMESTIC CURRENCIES DOMESTIC CURRENCY DOMESTIC ECONOMY DOMESTIC FINANCIAL MARKETS DOMESTIC INVESTORS DOMESTIC MARKETS DUMMY VARIABLE EMERGING ECONOMIES EMERGING ECONOMY EMERGING MARKET EMERGING MARKET ECONOMIES EMERGING MARKETS EQUITY FLOWS EQUITY FUNDS EQUITY SECURITIES EXCESS LIQUIDITY EXCHANGE RATE EXCHANGE RATE REGIME EXCHANGE RATES EXPORTERS EXTERNAL FINANCE EXTERNAL FINANCING FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL ASSET FINANCIAL CONTAGION FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENTS FINANCIAL FACTORS FINANCIAL FLOWS FINANCIAL INFLOWS FINANCIAL INSTABILITY FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL MARKETS FINANCIAL OPENNESS FINANCIAL REFORM FINANCIAL SECTOR FINANCIAL STABILITY FINANCIAL SUPPORT FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCIAL TRANSACTIONS FISCAL POLICIES FLEXIBLE EXCHANGE RATE FLEXIBLE EXCHANGE RATE REGIMES FLOATING RATES FLOW OF CAPITAL FLOW OF FUNDS FOREIGN ASSET FOREIGN ASSET POSITION FOREIGN ASSETS FOREIGN CAPITAL FOREIGN DEBT FOREIGN DIRECT INVESTMENT FOREIGN FINANCING FOREIGN INTEREST FOREIGN INVESTMENT FOREIGN INVESTORS GLOBAL CAPITAL GLOBAL CAPITAL FLOWS GLOBAL ECONOMY GLOBAL MARKETS GLOBAL RISK GLOBAL STOCK MARKETS GLOBALIZATION GOVERNMENT POLICIES GROWTH RATE HUMAN RESOURCE IMPLIED VOLATILITY INCOME INCOME DIFFERENTIALS INDUSTRIAL COUNTRIES INFLATION INFLATION CRISIS INFLATION RATE INFLOWS OF CAPITAL INTEREST RATE INTERNATIONAL BANK INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL FLOWS INTERNATIONAL CAPITAL MARKET INTERNATIONAL ECONOMICS INTERNATIONAL FINANCIAL INTEGRATION INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL INTEREST INTERNATIONAL TRADE INVESTMENT FLOWS INVESTMENT OPPORTUNITIES LIABILITY LIQUIDITY LIQUIDITY PROBLEMS LOAN LOCAL CURRENCIES LOCAL CURRENCY LOCAL INVESTORS MACROECONOMIC INSTABILITY MACROECONOMIC POLICY MARKET RETURN MATURITY MATURITY MISMATCHES MICRO DATA MIDDLE-INCOME COUNTRIES MONETARY AUTHORITY MONETARY POLICY MONETARY STABILITY MONEY MARKET MONEY MARKET RATE MUTUAL FUNDS NATURAL RESOURCE NATURAL RESOURCES NEGATIVE SHOCK NET CAPITAL NET DEBT OPEN ECONOMIES OUTPUT POLICY RESPONSES PORTFOLIO PORTFOLIO INFLOWS PORTFOLIO INVESTMENT PORTFOLIO RISK PORTFOLIOS POSITIVE COEFFICIENT PRIVATE CAPITAL PRIVATE CAPITAL INFLOWS PROPERTY RIGHTS PUSH FACTOR PUSH FACTORS RAPID EXPANSION REAL ECONOMIC ACTIVITY REAL EXCHANGE RATE REAL EXCHANGE RATES REAL INTEREST REAL INTEREST RATE REAL INTEREST RATES REGULATORY FRAMEWORK RESERVE RETURN RETURNS RISK AVERSION SHARE OF EQUITY SHORT-TERM LIABILITIES SOVEREIGN DEFAULT SOVEREIGN RISK STOCK MARKET STOCK MARKET VOLATILITY STOCK MARKETS STOCK RETURN STOCK RETURNS SYSTEMIC RISKS TAX TAX CODE TRADE BALANCE TRADING WORLD DEVELOPMENT INDICATORS WORLD ECONOMY WORLD FINANCIAL MARKETS WORLD STOCK MARKETS Calderón, César Kubota, Megumi Ride the Wild Surf : An Investigation of the Drivers of Surges in Capital Inflows |
| relation |
Policy Research Working Paper;No. 6753 |
| description |
Over the past 15 years, gross inflows to
industrial and developing countries have enjoyed a wild
ride. After reaching record highs in the run-up to the
global financial crisis, they collapsed dramatically in
2008-09. As signs of global recovery reappeared, capital
inflows resumed although at different speeds. The recovery
in flows was faster and sharper in developing countries.
This paper aims at understanding the (domestic and external)
drivers of these surges in gross inflows using quarterly
data for 67 countries from 1975 to 2010. It finds that
domestic and external factors have significant explanatory
power in driving surges of inflows. This finding holds for
the sample of industrial countries whereas domestic factors
play a significantly larger role in explaining surges to
developing countries. Zooming into the findings shows that:
(a) financial booms tend to attract massive capital inflows,
(b) surges to either industrial or developing countries are
driven by regional contagion, and (c) strong growth and
natural resource abundance are keys to attract inflows of
foreign capital into developing countries. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Calderón, César Kubota, Megumi |
| author_facet |
Calderón, César Kubota, Megumi |
| author_sort |
Calderón, César |
| title |
Ride the Wild Surf : An Investigation of the Drivers of Surges in Capital Inflows |
| title_short |
Ride the Wild Surf : An Investigation of the Drivers of Surges in Capital Inflows |
| title_full |
Ride the Wild Surf : An Investigation of the Drivers of Surges in Capital Inflows |
| title_fullStr |
Ride the Wild Surf : An Investigation of the Drivers of Surges in Capital Inflows |
| title_full_unstemmed |
Ride the Wild Surf : An Investigation of the Drivers of Surges in Capital Inflows |
| title_sort |
ride the wild surf : an investigation of the drivers of surges in capital inflows |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2014/01/18834369/ride-wild-surf-investigation-drivers-surges-capital-inflows http://hdl.handle.net/10986/16824 |
| _version_ |
1764435065781092352 |
| spelling |
okr-10986-168242021-04-23T14:03:33Z Ride the Wild Surf : An Investigation of the Drivers of Surges in Capital Inflows Calderón, César Kubota, Megumi ACCOUNTING ADVANCED COUNTRIES ADVANCED ECONOMIES ASSET POSITION ASSET PRICE ASSET PRICES ASYMMETRIC INFORMATION BALANCE OF PAYMENTS BALANCE SHEETS BANK POLICY BANKING CRISES BANKING CRISIS BOND BOND FUNDS BONDS BOOM-BUST CYCLES BROKERS CAPITAL ACCOUNT CAPITAL FLOW CAPITAL FLOWS CAPITAL INFLOW CAPITAL INFLOWS CAPITAL MOBILITY CAPITAL MOVEMENTS CENTRAL BANK CENTRAL BANKS COMMODITY COMMODITY PRICES CONSUMER PRICE INDEX COUNTRY RISK CREDIT EXPANSION CREDIT EXPANSIONS CREDIT GROWTH CREDIT MARKETS CREDITWORTHINESS CURRENCY CURRENCY CRISIS CURRENT ACCOUNT BALANCE CURRENT ACCOUNT BALANCES CURRENT ACCOUNT DEFICIT CURRENT ACCOUNT DEFICITS CURRENT ACCOUNT SURPLUSES DEBT DEBT CRISIS DEBT FLOWS DEBT RELIEF DEBT SECURITIES DEVALUATION DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPMENT BANK DOMESTIC CREDIT DOMESTIC CURRENCIES DOMESTIC CURRENCY DOMESTIC ECONOMY DOMESTIC FINANCIAL MARKETS DOMESTIC INVESTORS DOMESTIC MARKETS DUMMY VARIABLE EMERGING ECONOMIES EMERGING ECONOMY EMERGING MARKET EMERGING MARKET ECONOMIES EMERGING MARKETS EQUITY FLOWS EQUITY FUNDS EQUITY SECURITIES EXCESS LIQUIDITY EXCHANGE RATE EXCHANGE RATE REGIME EXCHANGE RATES EXPORTERS EXTERNAL FINANCE EXTERNAL FINANCING FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL ASSET FINANCIAL CONTAGION FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENTS FINANCIAL FACTORS FINANCIAL FLOWS FINANCIAL INFLOWS FINANCIAL INSTABILITY FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL MARKETS FINANCIAL OPENNESS FINANCIAL REFORM FINANCIAL SECTOR FINANCIAL STABILITY FINANCIAL SUPPORT FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCIAL TRANSACTIONS FISCAL POLICIES FLEXIBLE EXCHANGE RATE FLEXIBLE EXCHANGE RATE REGIMES FLOATING RATES FLOW OF CAPITAL FLOW OF FUNDS FOREIGN ASSET FOREIGN ASSET POSITION FOREIGN ASSETS FOREIGN CAPITAL FOREIGN DEBT FOREIGN DIRECT INVESTMENT FOREIGN FINANCING FOREIGN INTEREST FOREIGN INVESTMENT FOREIGN INVESTORS GLOBAL CAPITAL GLOBAL CAPITAL FLOWS GLOBAL ECONOMY GLOBAL MARKETS GLOBAL RISK GLOBAL STOCK MARKETS GLOBALIZATION GOVERNMENT POLICIES GROWTH RATE HUMAN RESOURCE IMPLIED VOLATILITY INCOME INCOME DIFFERENTIALS INDUSTRIAL COUNTRIES INFLATION INFLATION CRISIS INFLATION RATE INFLOWS OF CAPITAL INTEREST RATE INTERNATIONAL BANK INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL FLOWS INTERNATIONAL CAPITAL MARKET INTERNATIONAL ECONOMICS INTERNATIONAL FINANCIAL INTEGRATION INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL INTEREST INTERNATIONAL TRADE INVESTMENT FLOWS INVESTMENT OPPORTUNITIES LIABILITY LIQUIDITY LIQUIDITY PROBLEMS LOAN LOCAL CURRENCIES LOCAL CURRENCY LOCAL INVESTORS MACROECONOMIC INSTABILITY MACROECONOMIC POLICY MARKET RETURN MATURITY MATURITY MISMATCHES MICRO DATA MIDDLE-INCOME COUNTRIES MONETARY AUTHORITY MONETARY POLICY MONETARY STABILITY MONEY MARKET MONEY MARKET RATE MUTUAL FUNDS NATURAL RESOURCE NATURAL RESOURCES NEGATIVE SHOCK NET CAPITAL NET DEBT OPEN ECONOMIES OUTPUT POLICY RESPONSES PORTFOLIO PORTFOLIO INFLOWS PORTFOLIO INVESTMENT PORTFOLIO RISK PORTFOLIOS POSITIVE COEFFICIENT PRIVATE CAPITAL PRIVATE CAPITAL INFLOWS PROPERTY RIGHTS PUSH FACTOR PUSH FACTORS RAPID EXPANSION REAL ECONOMIC ACTIVITY REAL EXCHANGE RATE REAL EXCHANGE RATES REAL INTEREST REAL INTEREST RATE REAL INTEREST RATES REGULATORY FRAMEWORK RESERVE RETURN RETURNS RISK AVERSION SHARE OF EQUITY SHORT-TERM LIABILITIES SOVEREIGN DEFAULT SOVEREIGN RISK STOCK MARKET STOCK MARKET VOLATILITY STOCK MARKETS STOCK RETURN STOCK RETURNS SYSTEMIC RISKS TAX TAX CODE TRADE BALANCE TRADING WORLD DEVELOPMENT INDICATORS WORLD ECONOMY WORLD FINANCIAL MARKETS WORLD STOCK MARKETS Over the past 15 years, gross inflows to industrial and developing countries have enjoyed a wild ride. After reaching record highs in the run-up to the global financial crisis, they collapsed dramatically in 2008-09. As signs of global recovery reappeared, capital inflows resumed although at different speeds. The recovery in flows was faster and sharper in developing countries. This paper aims at understanding the (domestic and external) drivers of these surges in gross inflows using quarterly data for 67 countries from 1975 to 2010. It finds that domestic and external factors have significant explanatory power in driving surges of inflows. This finding holds for the sample of industrial countries whereas domestic factors play a significantly larger role in explaining surges to developing countries. Zooming into the findings shows that: (a) financial booms tend to attract massive capital inflows, (b) surges to either industrial or developing countries are driven by regional contagion, and (c) strong growth and natural resource abundance are keys to attract inflows of foreign capital into developing countries. 2014-02-03T20:47:35Z 2014-02-03T20:47:35Z 2014-01 http://documents.worldbank.org/curated/en/2014/01/18834369/ride-wild-surf-investigation-drivers-surges-capital-inflows http://hdl.handle.net/10986/16824 English en_US Policy Research Working Paper;No. 6753 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |