IDEAS home Printed from https://ideas.repec.org/a/afj/journ3/v9y2019i1p32-50.html
   My bibliography  Save this article

Flows to emerging market and developing economies – Global liquidity and uncertainty versus country-specific pull factors

Author

Listed:
  • Ansgar Belke
  • Ulrich Volz

    (University of London)

Abstract

This article investigates the empirical significance of push and pull factors of different types of capital flows – FDI, portfolio and “others” (including loans) – to emerging market and developing economies. Based on an extensive quarterly mixed timeseries panel dataset for 32 emerging market and developing economies from 2009 to 2017, we rigorously test down broadly specified empirical models for the three types of capital inflows to parsimonious final models in a Hendry-type fashion. Regarding push factors, our study focuses on the relative importance of global liquidity and economic policy uncertainty vis-àvis country-specific pull factors when assessing the drivers of capital flows to a broad set of emerging market and developing economies. Global liquidity, economic policy uncertainty and other risk factors, such as the US yield spread, turn out to be the most significant drivers of portfolio flows, but are also relevant to the other two categories of flows. Our capital flow-type specific estimation results underscore the need for policymakers to analyse the composition of observed capital inflows to assess vulnerabilities related to external financing and safeguard financial stability.

Suggested Citation

  • Ansgar Belke & Ulrich Volz, 2019. "Flows to emerging market and developing economies – Global liquidity and uncertainty versus country-specific pull factors," Review of Development Finance Journal, Chartered Institute of Development Finance, vol. 9(1), pages 32-50.
    • Handle: RePEc:afj:journ3:v:9:y:2019:i:1:p:32-50
    as

    Download full text from publisher

    File URL: https://journals.co.za/content/journal/10520/EJC-17ce884219
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Beirne, John & Renzhi, Nuobu & Volz, Ulrich, 2021. "Local Currency Bond Markets, Foreign Investor Participation, and Capital Flow Volatility in Emerging Asia," ADBI Working Papers 1252, Asian Development Bank Institute.
    2. Beirne, John Beirne & Renzhi, Nuobu & Sugandi, Eric Alexander & Volz, Ulrich, 2020. "Financial Market and Capital Flow Dynamics During the COVID-19 Pandemic," ADBI Working Papers 1158, Asian Development Bank Institute.

    More about this item

    Keywords

    Capital flows; push- and pull factors of capital flows; economic policy uncertainty; emerging market and developing economies; global liquidity; international spillovers;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:afj:journ3:v:9:y:2019:i:1:p:32-50. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk De Doncker (email available below). General contact details of provider: https://edirc.repec.org/data/afrgrza.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.