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Bilateral International Investments: The Big Sur?

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  • Broner, Fernando
  • Didier, Tatiana
  • Schmukler, Sergio L.
  • von Peter, Goetz

Abstract

Using country-to-country data, this paper documents a set of novel stylized facts about the rise of the South in global finance. The paper assembles comprehensive bilateral data on cross-border bank loans and deposits, portfolio investment in debt and equity, foreign direct investment, and international reserves. The main findings are that investments involving the South, and especially within the South, have grown faster than those within the North between 2001 and 2018. By 2018, the South was involved in 34% of total international investments. The largest increases occurred in portfolio investment and international reserves, the smallest in banking. These trends are observed across South regions, are not driven by China, and are reinforced when taking offshore finance into account. South-to-South investments tended to grow the fastest, even after controlling for regional GDP growth. The extensive margin increased significantly within the South, accounting for a sizable share of international investments by 2018

Suggested Citation

  • Broner, Fernando & Didier, Tatiana & Schmukler, Sergio L. & von Peter, Goetz, 2022. "Bilateral International Investments: The Big Sur?," CEPR Discussion Papers 17656, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:17656
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    Cited by:

    1. Sebastian Horn & Carmen M. Reinhart & Christoph Trebesch, 2022. "Hidden Defaults," AEA Papers and Proceedings, American Economic Association, vol. 112, pages 531-535, May.
    2. Florez-Orrego, Sergio & Maggiori, Matteo & Schreger, Jesse & Sun, Ziwen & Tinda, Serdil, 2023. "Global Capital Allocation," SocArXiv 5s6n3, Center for Open Science.
    3. George Pantelopoulos, 2024. "Can external sustainability be decoupled from the NIIP?," International Economics and Economic Policy, Springer, vol. 21(1), pages 89-116, February.
    4. Pamela Pogliani & Goetz von Peter & Philip Wooldridge, 2022. "The outsize role of cross-border financial centres," BIS Quarterly Review, Bank for International Settlements, June.
    5. Maurice Obstfeld, 2022. "Global Economic Recovery in the Face of COVID-19," Chapters, in: Lili Yan Ing & Dani Rodrik (ed.), New Normal, New Technologies, New Financing, chapter 3, pages 22-37, Economic Research Institute for ASEAN and East Asia (ERIA).
    6. Patrick McGuire & Goetz von Peter & Sonya Zhu, 2024. "International finance through the lens of BIS statistics: residence vs nationality," BIS Quarterly Review, Bank for International Settlements, March.

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    More about this item

    Keywords

    International banking; Foreign direct investment; International capital flows; International financial integration; Emerging economies; Portfolio investments;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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