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The External Financing of Emerging Markets--Evidence from Two Waves of Financial Globalization


  • André Faria
  • Paolo Mauro
  • Aleksandar Zaklan


What determines the yields at which international investors are willing to lend to emerging market countries, and the amounts of such lending? We analyze the motivation underlying investors' choices in allocating their holdings across countries, through regressions for both prices (bond yields) and quantities (bond market capitalization or stocks of external liabilities) estimated during two waves of financial globalization (1870--1913 and today). The results suggest that, throughout the past one and a half centuries, a combination of human capital (including informal human capital) and institutional quality has been a key determinant of emerging market countries' ability to attract international investors. Copyright 2011, Oxford University Press.

Suggested Citation

  • André Faria & Paolo Mauro & Aleksandar Zaklan, 2011. "The External Financing of Emerging Markets--Evidence from Two Waves of Financial Globalization," Review of Finance, European Finance Association, vol. 15(1), pages 207-243.
  • Handle: RePEc:oup:revfin:v:15:y:2011:i:1:p:207-243

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    Cited by:

    1. Eichler, Stefan, 2014. "The political determinants of sovereign bond yield spreads," Journal of International Money and Finance, Elsevier, vol. 46(C), pages 82-103.
    2. Stefan Eichler, 2017. "How Do Political Factors Shape the Bank Risk–Sovereign Risk Nexus in Emerging Markets?," Review of Development Economics, Wiley Blackwell, vol. 21(3), pages 451-474, August.
    3. Eichler, Stefan, 2015. "How Do Political Factors Shape the Bank Risk-Sovereign Risk Nexus in Emerging Markets?," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112877, Verein für Socialpolitik / German Economic Association.

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