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The composition of capital flows to South Africa

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Author Info

  • Faisal Ahmed

    (International Monetary Fund, 700 19 th Street, N.W., Washington, DC 20431, USA)

  • Rabah Arezki
  • Norbert Funke

    (International Monetary Fund, 700 19 th Street, N.W., Washington, DC 20431, USA)

Abstract

Unlike in most other emerging markets, capital flows to South Africa since the mid 1990s have been heavily biased toward portfolio flows. In this context, the objective of the paper is twofold: to identify the determinants of the level and composition of capital flows to emerging markets and to draw policy conclusions for South Africa. The empirical results suggest that further trade and capital control liberalisation would increase the share of FDI in South Africa. Additionally, a reduction in exchange rate volatility would affect the composition of capital flows in favour of FDI. Copyright © 2006 John Wiley & Sons, Ltd.

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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Journal of International Development.

Volume (Year): 19 (2007)
Issue (Month): 2 ()
Pages: 275-294

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Handle: RePEc:wly:jintdv:v:19:y:2007:i:2:p:275-294

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Web page: http://www3.interscience.wiley.com/journal/5102/home

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References

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Cited by:
  1. Elena Dumitrescu & Rabah Arezki & Andreas Freytag & Marc Quintyn, 2012. "Commodity Prices and Exchange Rate Volatility," IMF Working Papers 12/168, International Monetary Fund.

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