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Capital Flows in a Globalized World: The Role of Policies and Institutions

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  • Laura Alfaro
  • Sebnem Kalemli-Ozcan
  • Vadym Volosovych

Abstract

We describe the patterns of international capital flows in the period 1970 - 2000. We then examine the determinants of capital flows and capital flows volatility during this period. We find that institutional quality is an important determinant of capital flows. Historical determinants of current legal institutions have a direct effect on foreign investments. Policy plays a significant role in explaining the changes in the level of capital flows over time and their volatility.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11696.

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Date of creation: Oct 2005
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Publication status: published as Laura Alfaro, Sebnem Kalemli-Ozcan, Vadym Volosovych. "Capital Flows in a Globalized World: The Role of Policies and Institutions," in Sebastian Edwards, editor, "Capital Controls and Capital Flows in Emerging Economies: Policies, Practices and Consequences" University of Chicago Press (2007)
Handle: RePEc:nbr:nberwo:11696

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