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Capital Flows And Their Sectoral Destinations

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  • Petris Sorina

    (Universitatea din Oradea, Facultatea de Stiinte Economice)

Abstract

Since 2003, New European Union Member States have made large capital inflows, which led to a credit crunch and recession. Whether they are foreign direct investment, or banking flows, capital inflows ultimately affect GDP, depending on how they are invested. In the specialty literature, analysis of capital flows was done especially in terms of their structure, with a lack of analysis in terms of final destination of capital inflows. Therefore, we analyzed the effect of capital inflows on GDP in the New Member States of the European Union (Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovakia) over the last economic cycle. Based on experiences of the new Member States during the recent boom and crisis, the paper studies the impact of capital inflows on GDP growth, inflows channeled to economic sectors, such as real estate and corporate investment sector. The results of this research tries to highlight the extent to which the final destination of capital flows is important for the evolution of GDP.

Suggested Citation

  • Petris Sorina, 2012. "Capital Flows And Their Sectoral Destinations," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 825-829, July.
    • Handle: RePEc:ora:journl:v:1:y:2012:i:1:p:825-829
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    References listed on IDEAS

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    1. Ms. Pritha Mitra, 2011. "Capital Flows to EU New Member States: Does Sector Destination Matter?," IMF Working Papers 2011/067, International Monetary Fund.
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    More about this item

    Keywords

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    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

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