Equity and bond flows to Asia and Latin America : the role of global and country factors
AbstractThe authors investigate what has motivated the large portfolio flows to several developing countries in recent years. Using monthly data on U.S. capital flows to nine Latin American and nine Asian countries (instead of monthly reserves data), they analyze the behavior of bond and equity flows to those countries. Using panel data, they find that global factors - such as a drop in U.S. interest rates and the slowdown in U.S. industrial production - are important in explaining capital inflows. But country developments are at least as important in determining those flows, especially for Asia. They also find that equity flows are more sensitive than bond flows to global factors, but that bond flows are generally more sensitive to a country's credit rating and to the secondary market price of debt.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 1160.
Date of creation: 31 Jul 1993
Date of revision:
Economic Theory&Research; Banks&Banking Reform; Financial Intermediation; Environmental Economics&Policies; Macroeconomic Management;
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