Financial Globalization in Emerging Economies : Much Ado about Nothing?
Financial globalization, defined as global linkages through cross-border financial flows, has become increasingly relevant for emerging markets as they integrate financially with the rest of the world. This paper argues that, because of the way it...
| Main Authors: | , |
|---|---|
| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
|
| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110405092056 http://hdl.handle.net/10986/3390 |
| id |
okr-10986-3390 |
|---|---|
| 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 |
| topic |
ADVANCED COUNTRIES ADVANCED ECONOMIES ARBITRAGE ASSET HOLDINGS ASSET POSITIONS ASSET PRICE ASSET PRICES ASSET TYPE BALANCE OF PAYMENTS BALANCE SHEETS BANK DEPOSITS BANKING SECTOR BENCHMARKS BOND BOND FUNDS BUSINESS CYCLE CAPITAL ACCOUNT CAPITAL ACCOUNT LIBERALIZATION CAPITAL CONTROLS CAPITAL FLIGHT CAPITAL FLOW CAPITAL FLOWS CAPITAL MOBILITY CAPITAL OUTFLOWS CAPITAL REPATRIATION CAPITAL STOCK CDS CENTRAL BANK CONSUMPTION SMOOTHING CORPORATE DEBT CREDIT RISKS CREDIT SPREADS CRISIS COUNTRY CROSS-BORDER FLOWS CROSS-BORDER INVESTMENTS CURRENCY CURRENCY MISMATCHES CURRENCY RISK DEBT DEBT FLOWS DEBT HOLDINGS DEBT INSTRUMENTS DEBT RATIOS DEBT SECURITIES DEBTS DEGREE OF RISK DEPOSIT DERIVATIVES DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPING MARKETS DEVELOPMENT BANK DIVERSIFICATION BENEFITS DIVERSIFIED PORTFOLIO DIVIDENDS DOMESTIC ECONOMY DOMESTIC EQUITY DOMESTIC FINANCIAL MARKETS DOMESTIC MARKET DOMESTIC MARKETS ECONOMIC DEVELOPMENT ECONOMIC PERFORMANCE ECONOMIC POLICIES EMERGING ECONOMIES EMERGING MARKETS EQUITIES EQUITY FLOWS EQUITY HOLDINGS EQUITY INDEXES EQUITY INSTRUMENTS EQUITY MARKET EQUITY MARKET CAPITALIZATION EQUITY MARKETS EQUITY PORTFOLIO EQUITY PORTFOLIOS EQUITY PRICE EQUITY PRICES EQUITY RETURNS EQUITY VALUATION EXCHANGE RATES EXPOSURE EXTERNAL DEBT FINANCIAL ASSETS FINANCIAL CONTAGION FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL FLOWS FINANCIAL FRAGILITY FINANCIAL INNOVATION FINANCIAL MARKET FINANCIAL OPENNESS FINANCIAL PORTFOLIOS FINANCIAL RISK FINANCIAL SECTOR FINANCIAL SHOCKS FINANCIAL STABILITY FIXED INCOME FIXED INCOME MARKETS FIXED INCOME SECURITIES FLOWS OF CAPITAL FOREIGN ASSET FOREIGN ASSETS FOREIGN CAPITAL FOREIGN DEBT FOREIGN EQUITY FOREIGN HOLDINGS FOREIGN INFLOWS FOREIGN INVESTMENT FOREIGN LENDERS FOREIGN PORTFOLIO FOREIGN SHARE GLOBAL DIVERSIFICATION GLOBAL EQUITY GLOBAL FUND GLOBAL FUNDS GLOBAL MARKET GLOBAL MUTUAL FUNDS GLOBAL PORTFOLIO GLOBAL RISK GLOBALIZATION GROWTH RATE GROWTH RATES HEDGE FUND HEDGE FUNDS HOLDING HOST COUNTRY INCOME FLOWS INCOME SHOCKS INDEBTED COUNTRIES INFLATION INSTRUMENT INTERNATIONAL BANK INTERNATIONAL DIVERSIFICATION INTERNATIONAL ECONOMICS INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL INTEGRATION INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL INVESTOR INTERNATIONAL INVESTORS INTERNATIONAL PORTFOLIO INTERNATIONAL SECURITIES INVESTING INVESTMENT VEHICLES ISSUANCE LEVY LIABILITY LIQUID MARKETS LIQUIDITY LIQUIDITY CRUNCH LIQUIDITY RISKS LOCAL DEBT LOCAL DEBT MARKETS LOCAL EQUITY MARKETS LOCAL MARKET LOCAL MARKETS LOCAL STOCK MARKET LOW-INCOME COUNTRIES MACROECONOMIC VOLATILITY MARKET CONDITIONS MARKET DEEPENING MARKET DEPTH MARKET DEVELOPMENT MARKET DEVELOPMENTS MARKET DISCOUNTS MARKET INVESTMENT MARKET SIZE MARKET VALUE MARKET VALUES MIDDLE-INCOME ECONOMIES MONETARY FUND MUTUAL FUNDS NET DEBT OPEN ECONOMY OUTPUT PHYSICAL ASSETS PORTFOLIO COMPOSITION PORTFOLIO DIVERSIFICATION PORTFOLIO FLOWS PORTFOLIO HOLDINGS PORTFOLIO INVESTOR PORTFOLIO RISK PORTFOLIOS PRICE CHANGES PRICE VOLATILITY PRIVATE CREDIT PROFESSIONAL INVESTORS REDEMPTIONS RESERVE RETURN RETURN DIFFERENTIALS RETURNS RISK AVERSION RISK DIVERSIFICATION RISK POOLING RISK SHARING SAVINGS SAVINGS CAPACITY SECURITIES MARKETS SECURITIES PORTFOLIO SETTLEMENT SINGLE MARKET SOLVENCY SOVEREIGN DEBT STOCK DATA STOCK MARKET STOCK MARKET CAPITALIZATION STOCK MARKET DEVELOPMENT STOCKS SWAPS TAX TERMS OF CREDIT TOTAL DEBT TRADE LIBERALIZATION TRADES TRADING TRANSACTION TRANSACTION COSTS TRANSPARENCY TREASURY TURNOVER VALUATION VALUATION CHANGES VOLATILITIES |
| spellingShingle |
ADVANCED COUNTRIES ADVANCED ECONOMIES ARBITRAGE ASSET HOLDINGS ASSET POSITIONS ASSET PRICE ASSET PRICES ASSET TYPE BALANCE OF PAYMENTS BALANCE SHEETS BANK DEPOSITS BANKING SECTOR BENCHMARKS BOND BOND FUNDS BUSINESS CYCLE CAPITAL ACCOUNT CAPITAL ACCOUNT LIBERALIZATION CAPITAL CONTROLS CAPITAL FLIGHT CAPITAL FLOW CAPITAL FLOWS CAPITAL MOBILITY CAPITAL OUTFLOWS CAPITAL REPATRIATION CAPITAL STOCK CDS CENTRAL BANK CONSUMPTION SMOOTHING CORPORATE DEBT CREDIT RISKS CREDIT SPREADS CRISIS COUNTRY CROSS-BORDER FLOWS CROSS-BORDER INVESTMENTS CURRENCY CURRENCY MISMATCHES CURRENCY RISK DEBT DEBT FLOWS DEBT HOLDINGS DEBT INSTRUMENTS DEBT RATIOS DEBT SECURITIES DEBTS DEGREE OF RISK DEPOSIT DERIVATIVES DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPING MARKETS DEVELOPMENT BANK DIVERSIFICATION BENEFITS DIVERSIFIED PORTFOLIO DIVIDENDS DOMESTIC ECONOMY DOMESTIC EQUITY DOMESTIC FINANCIAL MARKETS DOMESTIC MARKET DOMESTIC MARKETS ECONOMIC DEVELOPMENT ECONOMIC PERFORMANCE ECONOMIC POLICIES EMERGING ECONOMIES EMERGING MARKETS EQUITIES EQUITY FLOWS EQUITY HOLDINGS EQUITY INDEXES EQUITY INSTRUMENTS EQUITY MARKET EQUITY MARKET CAPITALIZATION EQUITY MARKETS EQUITY PORTFOLIO EQUITY PORTFOLIOS EQUITY PRICE EQUITY PRICES EQUITY RETURNS EQUITY VALUATION EXCHANGE RATES EXPOSURE EXTERNAL DEBT FINANCIAL ASSETS FINANCIAL CONTAGION FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL FLOWS FINANCIAL FRAGILITY FINANCIAL INNOVATION FINANCIAL MARKET FINANCIAL OPENNESS FINANCIAL PORTFOLIOS FINANCIAL RISK FINANCIAL SECTOR FINANCIAL SHOCKS FINANCIAL STABILITY FIXED INCOME FIXED INCOME MARKETS FIXED INCOME SECURITIES FLOWS OF CAPITAL FOREIGN ASSET FOREIGN ASSETS FOREIGN CAPITAL FOREIGN DEBT FOREIGN EQUITY FOREIGN HOLDINGS FOREIGN INFLOWS FOREIGN INVESTMENT FOREIGN LENDERS FOREIGN PORTFOLIO FOREIGN SHARE GLOBAL DIVERSIFICATION GLOBAL EQUITY GLOBAL FUND GLOBAL FUNDS GLOBAL MARKET GLOBAL MUTUAL FUNDS GLOBAL PORTFOLIO GLOBAL RISK GLOBALIZATION GROWTH RATE GROWTH RATES HEDGE FUND HEDGE FUNDS HOLDING HOST COUNTRY INCOME FLOWS INCOME SHOCKS INDEBTED COUNTRIES INFLATION INSTRUMENT INTERNATIONAL BANK INTERNATIONAL DIVERSIFICATION INTERNATIONAL ECONOMICS INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL INTEGRATION INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL INVESTOR INTERNATIONAL INVESTORS INTERNATIONAL PORTFOLIO INTERNATIONAL SECURITIES INVESTING INVESTMENT VEHICLES ISSUANCE LEVY LIABILITY LIQUID MARKETS LIQUIDITY LIQUIDITY CRUNCH LIQUIDITY RISKS LOCAL DEBT LOCAL DEBT MARKETS LOCAL EQUITY MARKETS LOCAL MARKET LOCAL MARKETS LOCAL STOCK MARKET LOW-INCOME COUNTRIES MACROECONOMIC VOLATILITY MARKET CONDITIONS MARKET DEEPENING MARKET DEPTH MARKET DEVELOPMENT MARKET DEVELOPMENTS MARKET DISCOUNTS MARKET INVESTMENT MARKET SIZE MARKET VALUE MARKET VALUES MIDDLE-INCOME ECONOMIES MONETARY FUND MUTUAL FUNDS NET DEBT OPEN ECONOMY OUTPUT PHYSICAL ASSETS PORTFOLIO COMPOSITION PORTFOLIO DIVERSIFICATION PORTFOLIO FLOWS PORTFOLIO HOLDINGS PORTFOLIO INVESTOR PORTFOLIO RISK PORTFOLIOS PRICE CHANGES PRICE VOLATILITY PRIVATE CREDIT PROFESSIONAL INVESTORS REDEMPTIONS RESERVE RETURN RETURN DIFFERENTIALS RETURNS RISK AVERSION RISK DIVERSIFICATION RISK POOLING RISK SHARING SAVINGS SAVINGS CAPACITY SECURITIES MARKETS SECURITIES PORTFOLIO SETTLEMENT SINGLE MARKET SOLVENCY SOVEREIGN DEBT STOCK DATA STOCK MARKET STOCK MARKET CAPITALIZATION STOCK MARKET DEVELOPMENT STOCKS SWAPS TAX TERMS OF CREDIT TOTAL DEBT TRADE LIBERALIZATION TRADES TRADING TRANSACTION TRANSACTION COSTS TRANSPARENCY TREASURY TURNOVER VALUATION VALUATION CHANGES VOLATILITIES Yeyati, Eduardo Levy Williams, Tomas Financial Globalization in Emerging Economies : Much Ado about Nothing? |
| geographic_facet |
The World Region The World Region |
| relation |
Policy Research working paper ; no. WPS 5624 |
| description |
Financial globalization, defined as
global linkages through cross-border financial flows, has
become increasingly relevant for emerging markets as they
integrate financially with the rest of the world. This paper
argues that, because of the way it is often measured, it has
also led to the misperception that financial globalization
in emerging markets has been growing in recent years. The
authors characterize the evolution of financial
globalization in emerging markets using alternative
measures, and find that, in the 2000s, financial
globalization has grown only marginally and international
portfolio diversification has been limited and declining
over time. The paper revisits the empirical literature on
the implications of financial globalization for local market
deepening, international risk diversification, financial
contagion, and financial dollarization, and finds them to be
rather limited. Whereas financial globalization has indeed
fostered domestic market deepening in good times, it has
yielded neither the dividends of consumption smoothing (in
line with limited portfolio diversification) nor the costs
of amplifying global financial shocks. In turn, financial
de-dollarization has largely reflected the undoing of
financial offshoring and the valuation effects of real appreciation. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Yeyati, Eduardo Levy Williams, Tomas |
| author_facet |
Yeyati, Eduardo Levy Williams, Tomas |
| author_sort |
Yeyati, Eduardo Levy |
| title |
Financial Globalization in Emerging Economies : Much Ado about Nothing? |
| title_short |
Financial Globalization in Emerging Economies : Much Ado about Nothing? |
| title_full |
Financial Globalization in Emerging Economies : Much Ado about Nothing? |
| title_fullStr |
Financial Globalization in Emerging Economies : Much Ado about Nothing? |
| title_full_unstemmed |
Financial Globalization in Emerging Economies : Much Ado about Nothing? |
| title_sort |
financial globalization in emerging economies : much ado about nothing? |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110405092056 http://hdl.handle.net/10986/3390 |
| _version_ |
1764386905515884544 |
| spelling |
okr-10986-33902021-04-23T14:02:09Z Financial Globalization in Emerging Economies : Much Ado about Nothing? Yeyati, Eduardo Levy Williams, Tomas ADVANCED COUNTRIES ADVANCED ECONOMIES ARBITRAGE ASSET HOLDINGS ASSET POSITIONS ASSET PRICE ASSET PRICES ASSET TYPE BALANCE OF PAYMENTS BALANCE SHEETS BANK DEPOSITS BANKING SECTOR BENCHMARKS BOND BOND FUNDS BUSINESS CYCLE CAPITAL ACCOUNT CAPITAL ACCOUNT LIBERALIZATION CAPITAL CONTROLS CAPITAL FLIGHT CAPITAL FLOW CAPITAL FLOWS CAPITAL MOBILITY CAPITAL OUTFLOWS CAPITAL REPATRIATION CAPITAL STOCK CDS CENTRAL BANK CONSUMPTION SMOOTHING CORPORATE DEBT CREDIT RISKS CREDIT SPREADS CRISIS COUNTRY CROSS-BORDER FLOWS CROSS-BORDER INVESTMENTS CURRENCY CURRENCY MISMATCHES CURRENCY RISK DEBT DEBT FLOWS DEBT HOLDINGS DEBT INSTRUMENTS DEBT RATIOS DEBT SECURITIES DEBTS DEGREE OF RISK DEPOSIT DERIVATIVES DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPING MARKETS DEVELOPMENT BANK DIVERSIFICATION BENEFITS DIVERSIFIED PORTFOLIO DIVIDENDS DOMESTIC ECONOMY DOMESTIC EQUITY DOMESTIC FINANCIAL MARKETS DOMESTIC MARKET DOMESTIC MARKETS ECONOMIC DEVELOPMENT ECONOMIC PERFORMANCE ECONOMIC POLICIES EMERGING ECONOMIES EMERGING MARKETS EQUITIES EQUITY FLOWS EQUITY HOLDINGS EQUITY INDEXES EQUITY INSTRUMENTS EQUITY MARKET EQUITY MARKET CAPITALIZATION EQUITY MARKETS EQUITY PORTFOLIO EQUITY PORTFOLIOS EQUITY PRICE EQUITY PRICES EQUITY RETURNS EQUITY VALUATION EXCHANGE RATES EXPOSURE EXTERNAL DEBT FINANCIAL ASSETS FINANCIAL CONTAGION FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL FLOWS FINANCIAL FRAGILITY FINANCIAL INNOVATION FINANCIAL MARKET FINANCIAL OPENNESS FINANCIAL PORTFOLIOS FINANCIAL RISK FINANCIAL SECTOR FINANCIAL SHOCKS FINANCIAL STABILITY FIXED INCOME FIXED INCOME MARKETS FIXED INCOME SECURITIES FLOWS OF CAPITAL FOREIGN ASSET FOREIGN ASSETS FOREIGN CAPITAL FOREIGN DEBT FOREIGN EQUITY FOREIGN HOLDINGS FOREIGN INFLOWS FOREIGN INVESTMENT FOREIGN LENDERS FOREIGN PORTFOLIO FOREIGN SHARE GLOBAL DIVERSIFICATION GLOBAL EQUITY GLOBAL FUND GLOBAL FUNDS GLOBAL MARKET GLOBAL MUTUAL FUNDS GLOBAL PORTFOLIO GLOBAL RISK GLOBALIZATION GROWTH RATE GROWTH RATES HEDGE FUND HEDGE FUNDS HOLDING HOST COUNTRY INCOME FLOWS INCOME SHOCKS INDEBTED COUNTRIES INFLATION INSTRUMENT INTERNATIONAL BANK INTERNATIONAL DIVERSIFICATION INTERNATIONAL ECONOMICS INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL INTEGRATION INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL INVESTOR INTERNATIONAL INVESTORS INTERNATIONAL PORTFOLIO INTERNATIONAL SECURITIES INVESTING INVESTMENT VEHICLES ISSUANCE LEVY LIABILITY LIQUID MARKETS LIQUIDITY LIQUIDITY CRUNCH LIQUIDITY RISKS LOCAL DEBT LOCAL DEBT MARKETS LOCAL EQUITY MARKETS LOCAL MARKET LOCAL MARKETS LOCAL STOCK MARKET LOW-INCOME COUNTRIES MACROECONOMIC VOLATILITY MARKET CONDITIONS MARKET DEEPENING MARKET DEPTH MARKET DEVELOPMENT MARKET DEVELOPMENTS MARKET DISCOUNTS MARKET INVESTMENT MARKET SIZE MARKET VALUE MARKET VALUES MIDDLE-INCOME ECONOMIES MONETARY FUND MUTUAL FUNDS NET DEBT OPEN ECONOMY OUTPUT PHYSICAL ASSETS PORTFOLIO COMPOSITION PORTFOLIO DIVERSIFICATION PORTFOLIO FLOWS PORTFOLIO HOLDINGS PORTFOLIO INVESTOR PORTFOLIO RISK PORTFOLIOS PRICE CHANGES PRICE VOLATILITY PRIVATE CREDIT PROFESSIONAL INVESTORS REDEMPTIONS RESERVE RETURN RETURN DIFFERENTIALS RETURNS RISK AVERSION RISK DIVERSIFICATION RISK POOLING RISK SHARING SAVINGS SAVINGS CAPACITY SECURITIES MARKETS SECURITIES PORTFOLIO SETTLEMENT SINGLE MARKET SOLVENCY SOVEREIGN DEBT STOCK DATA STOCK MARKET STOCK MARKET CAPITALIZATION STOCK MARKET DEVELOPMENT STOCKS SWAPS TAX TERMS OF CREDIT TOTAL DEBT TRADE LIBERALIZATION TRADES TRADING TRANSACTION TRANSACTION COSTS TRANSPARENCY TREASURY TURNOVER VALUATION VALUATION CHANGES VOLATILITIES Financial globalization, defined as global linkages through cross-border financial flows, has become increasingly relevant for emerging markets as they integrate financially with the rest of the world. This paper argues that, because of the way it is often measured, it has also led to the misperception that financial globalization in emerging markets has been growing in recent years. The authors characterize the evolution of financial globalization in emerging markets using alternative measures, and find that, in the 2000s, financial globalization has grown only marginally and international portfolio diversification has been limited and declining over time. The paper revisits the empirical literature on the implications of financial globalization for local market deepening, international risk diversification, financial contagion, and financial dollarization, and finds them to be rather limited. Whereas financial globalization has indeed fostered domestic market deepening in good times, it has yielded neither the dividends of consumption smoothing (in line with limited portfolio diversification) nor the costs of amplifying global financial shocks. In turn, financial de-dollarization has largely reflected the undoing of financial offshoring and the valuation effects of real appreciation. 2012-03-19T18:01:37Z 2012-03-19T18:01:37Z 2011-04-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110405092056 http://hdl.handle.net/10986/3390 English Policy Research working paper ; no. WPS 5624 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region |