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Capital Flows to developing countries: does the emperor have clothes?

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  • S Griffith-Jones (IDS, University of Sussex) and J Leape (LSE)

Abstract

This paper begins by examining the pattern of capital flows first to low-income countries, and then to emerging economies. In both cases, we see a dramatic collapse in the last several years. The evolving determinants of these trends in FDI flows (the principal category of private flows to low-income countries) and other capital flows are analysed. The behaviour of flows to emerging economies heavily influences both present and potential future flows to low-income countries. The paper concludes with the policy implications at both source countries and low-income recipient countries.

Suggested Citation

  • S Griffith-Jones (IDS, University of Sussex) and J Leape (LSE), "undated". "Capital Flows to developing countries: does the emperor have clothes?," QEH Working Papers qehwps89, Queen Elizabeth House, University of Oxford.
    • Handle: RePEc:qeh:qehwps:qehwps89
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    File URL: http://workingpapers.qeh.ox.ac.uk/RePEc/qeh/qehwps/qehwps89.pdf
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    References listed on IDEAS

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    1. Carolyn Jenkins & Jonathan Leape & Lynne Thomas, 2000. "Gaining from Trade in Southern Africa," Palgrave Macmillan Books, in: Carolyn Jenkins & Jonathan Leape & Lynne Thomas (ed.), Gaining from Trade in Southern Africa, chapter 1, pages 1-23, Palgrave Macmillan.
    2. La Porta, Rafael & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1997. "Legal Determinants of External Finance," Journal of Finance, American Finance Association, vol. 52(3), pages 1131-1150, July.
    3. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-959, December.
    4. Rajan, Raghuram G & Zingales, Luigi, 1998. "Financial Dependence and Growth," American Economic Review, American Economic Association, vol. 88(3), pages 559-586, June.
    5. Asli Demeirgüç-Kunt & Ross Levine (ed.), 0. "Finance and Growth," Books, Edward Elgar Publishing, number 17119.
    6. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Law and Finance," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1113-1155, December.
    7. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    8. Beck, Thorsten & Levine, Ross & Loayza, Norman, 2000. "Finance and the sources of growth," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 261-300.
    9. Mr. Manmohan S. Kumar & Mr. Avinash Persaud, 2001. "Pure Contagion and Investors Shifting Risk Appetite: Analytical Issues and Empirical Evidence," IMF Working Papers 2001/134, International Monetary Fund.
    10. Ross Levine, 1999. "Financial development and growth: where do we stand?," Estudios de Economia, University of Chile, Department of Economics, vol. 26(2 Year 19), pages 113-136, December.
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    Citations

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    Cited by:

    1. Jansen, Marion & Vennes, Yannick, 2006. "Liberalizing financial services trade in Africa: Going regional and multilateral," WTO Staff Working Papers ERSD-2006-03, World Trade Organization (WTO), Economic Research and Statistics Division.
    2. Williamson, John, 2003. "Proposals for curbing the boom-bust cycle in the supply of capital to emerging markets," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1791.
    3. Yin‐Wong Cheung & Xingwang Qian, 2009. "Empirics Of China'S Outward Direct Investment," Pacific Economic Review, Wiley Blackwell, vol. 14(3), pages 312-341, August.
    4. Bryane Michael, 2004. "What Does the UN Convention on Corruption Teach Us About International Regulatory Harmonisation?," Macroeconomics 0406004, University Library of Munich, Germany.
    5. Jang Ping Thia, 2008. "Why Capital does not Migrate to the South: A New Economic Geography Perspective," CEP Discussion Papers dp0895, Centre for Economic Performance, LSE.
    6. Griffith-Jones, Stephany & Segoviano, Miguel Angel & Spratt, Stephen, 2004. "Basel II: developing countries and portfolio diversification," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    7. Stephany Griffith-Jones & Stephen Spratt, 2003. "Basel II and Developing Countries: Diversification and Portfolio Effects," FMG Discussion Papers dp437, Financial Markets Group.
    8. Griffith-Jones, Stephany & Segoviano, Miguel Angel & Spratt, Stephen, 2003. "Basel II and developing countries: diversification and portfolio effects," LSE Research Online Documents on Economics 24824, London School of Economics and Political Science, LSE Library.

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