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The impact of population ageing on international capital flows

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  • Narciso, Alexandre

Abstract

This paper is oriented to study the relationship between demographical factors and international capital flows. We analyse the impact of ageing on foreign direct investments (FDI) and foreign portfolio investments (FPI) on a bilateral level. Firstly we present a theoretical foundation of the relationship and then we test it by an empirical model. Theoretical foundations are based on the lifecycle hypothesis and overlapping generations model in a demographic context. The bilateral FDI and FPI are modelled by using fixed effects balanced panel data. The results suggest that the current and future age structure of the nation has significant effect on current international capital flows.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 26457.

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Date of creation: 04 Nov 2010
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Handle: RePEc:pra:mprapa:26457

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Keywords: International Capital Flows; Demography; Capital Mobility; FDI; Portfolio Investment;

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Cited by:
  1. Renuga Nagarajan & Aurora A.C. Teixeira & Sandra T. Silva, 2013. "The impact of an ageing population on economic growth: an exploratory review of the main mechanisms," FEP Working Papers, Universidade do Porto, Faculdade de Economia do Porto 504, Universidade do Porto, Faculdade de Economia do Porto.
  2. Peeters, Marga, 2012. "Asymmetric demographic pressure in South-Mediterranean versus North-Mediterranean economies and its impact on international gross capital flows," MPRA Paper 39635, University Library of Munich, Germany.

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