What Factors Appear to Drive Private Capital Flows to Developing Countries? And How Does Official Lending Respond?
The authors study what drives private capital flows to developing countries, as well as the apparent response of official lending for the years 1978-97. Econometric results reveal that non-foreign direct investment portfolio flows to a country tend...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2000/07/436951/factors-appear-drive-private-capital-flows-developing-countries-official-lending-respond http://hdl.handle.net/10986/19821 |
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okr-10986-198212021-04-23T14:03:46Z What Factors Appear to Drive Private Capital Flows to Developing Countries? And How Does Official Lending Respond? Dasgupta, Dipak Ratha, Dilip ADJUSTMENT LENDING AGGREGATE LEVEL ALLOCATION MODELS BALANCE OF PAYMENTS BANK LENDING BANK LOANS BENCHMARK BLEND COUNTRIES BONDS BORROWING BORROWING COUNTRIES CAPITAL FLOWS CAPITAL MARKETS COMMERCIAL BORROWING COMMERCIAL LOANS COUNTRY LEVEL COUNTRY SPECIFIC CREDIT RATIONING CREDIT RISK CURRENT ACCOUNT CURRENT ACCOUNT DEFICIT CYCLICAL BEHAVIOR DEBT DECISION MAKING DEPENDENT VARIABLE DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPING WORLD DEVELOPMENT ECONOMICS ECONOMETRIC ANALYSIS ECONOMIC CONDITIONS ECONOMIC DEVELOPMENT ECONOMIC GROWTH EMPIRICAL RESULTS EXOGENOUS VARIABLES EXPLANATORY VARIABLES FINANCIAL ASSETS FINANCIAL CRISIS FINANCIAL FLOWS FINANCIAL INSTITUTIONS FINANCIAL MARKETS FISCAL YEAR FORECASTS FOREIGN EXCHANGE GDP GDP GLOBAL MARKETS GLOBALIZATION GNP GROWTH PERFORMANCE GROWTH RATE HIGH VOLATILITY INCOME DEVELOPING COUNTRIES INCOME GROUP INCOME LEVELS INDEPENDENT VARIABLES INDUSTRIAL COUNTRIES INFLATION INFLATION RATE INFLATION RATES INTEREST RATES INTERNATIONAL RESERVES LAGGED DEPENDENT LIQUIDITY LOW- INCOME COUNTRIES LOW-INCOME COUNTRIES MACROECONOMIC VARIABLES MATURITIES MIDDLE-INCOME COUNTRIES MORAL HAZARD NEGATIVE EFFECT NEGATIVE SIGN PER CAPITA PER CAPITA INCOME PER CAPITA INCOMES POLICY REFORMS POLICY RESEARCH PORTFOLIO PRIMARY COMMODITIES PRIVATIZATION QUANTITATIVE ANALYSIS RAPID GROWTH REAL EXCHANGE REAL EXCHANGE RATE REAL EXCHANGE RATES REAL INTEREST REAL INTEREST RATE REAL INTEREST RATES REAL PRICES REDUCED FORM EQUATION REGIONAL DISTRIBUTION RELATIVE IMPORTANCE RISING DEMAND RISING TREND SHARP FALL SIGNIFICANT FACTOR The authors study what drives private capital flows to developing countries, as well as the apparent response of official lending for the years 1978-97. Econometric results reveal that non-foreign direct investment portfolio flows to a country tended to rise in response to: 1) An increase in the current account deficit. 2) A rise in foreign direct investment flows. 3) Higher per capita income. 4) Growth performance. Once those variables were accounted for, private flows did not seem to be influenced by location, and regional factors. In addition, private capital flows (whether foreign direct investment or not) seem to respond positively (with a one-year lag) to World Bank lending commitments. By far the most important determinant of official lending to a developing country, seems to be the external current account balance, or a change in international reserves in the country. Official flows - including World Bank lending - appear to have played a stabilizing (or counter-cyclical) role in response to the volatility of private capital flows, and fluctuations in commodity prices, and GDP growth. (The stabilizing effect is weak, as official flows are only one-tenth of total long-term flows). 2014-08-28T17:52:49Z 2014-08-28T17:52:49Z 2000-07 http://documents.worldbank.org/curated/en/2000/07/436951/factors-appear-drive-private-capital-flows-developing-countries-official-lending-respond http://hdl.handle.net/10986/19821 English en_US Policy Research Working Paper;No. 2392 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
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Digital Repository |
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Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
| language |
English en_US |
| topic |
ADJUSTMENT LENDING AGGREGATE LEVEL ALLOCATION MODELS BALANCE OF PAYMENTS BANK LENDING BANK LOANS BENCHMARK BLEND COUNTRIES BONDS BORROWING BORROWING COUNTRIES CAPITAL FLOWS CAPITAL MARKETS COMMERCIAL BORROWING COMMERCIAL LOANS COUNTRY LEVEL COUNTRY SPECIFIC CREDIT RATIONING CREDIT RISK CURRENT ACCOUNT CURRENT ACCOUNT DEFICIT CYCLICAL BEHAVIOR DEBT DECISION MAKING DEPENDENT VARIABLE DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPING WORLD DEVELOPMENT ECONOMICS ECONOMETRIC ANALYSIS ECONOMIC CONDITIONS ECONOMIC DEVELOPMENT ECONOMIC GROWTH EMPIRICAL RESULTS EXOGENOUS VARIABLES EXPLANATORY VARIABLES FINANCIAL ASSETS FINANCIAL CRISIS FINANCIAL FLOWS FINANCIAL INSTITUTIONS FINANCIAL MARKETS FISCAL YEAR FORECASTS FOREIGN EXCHANGE GDP GDP GLOBAL MARKETS GLOBALIZATION GNP GROWTH PERFORMANCE GROWTH RATE HIGH VOLATILITY INCOME DEVELOPING COUNTRIES INCOME GROUP INCOME LEVELS INDEPENDENT VARIABLES INDUSTRIAL COUNTRIES INFLATION INFLATION RATE INFLATION RATES INTEREST RATES INTERNATIONAL RESERVES LAGGED DEPENDENT LIQUIDITY LOW- INCOME COUNTRIES LOW-INCOME COUNTRIES MACROECONOMIC VARIABLES MATURITIES MIDDLE-INCOME COUNTRIES MORAL HAZARD NEGATIVE EFFECT NEGATIVE SIGN PER CAPITA PER CAPITA INCOME PER CAPITA INCOMES POLICY REFORMS POLICY RESEARCH PORTFOLIO PRIMARY COMMODITIES PRIVATIZATION QUANTITATIVE ANALYSIS RAPID GROWTH REAL EXCHANGE REAL EXCHANGE RATE REAL EXCHANGE RATES REAL INTEREST REAL INTEREST RATE REAL INTEREST RATES REAL PRICES REDUCED FORM EQUATION REGIONAL DISTRIBUTION RELATIVE IMPORTANCE RISING DEMAND RISING TREND SHARP FALL SIGNIFICANT FACTOR |
| spellingShingle |
ADJUSTMENT LENDING AGGREGATE LEVEL ALLOCATION MODELS BALANCE OF PAYMENTS BANK LENDING BANK LOANS BENCHMARK BLEND COUNTRIES BONDS BORROWING BORROWING COUNTRIES CAPITAL FLOWS CAPITAL MARKETS COMMERCIAL BORROWING COMMERCIAL LOANS COUNTRY LEVEL COUNTRY SPECIFIC CREDIT RATIONING CREDIT RISK CURRENT ACCOUNT CURRENT ACCOUNT DEFICIT CYCLICAL BEHAVIOR DEBT DECISION MAKING DEPENDENT VARIABLE DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPING WORLD DEVELOPMENT ECONOMICS ECONOMETRIC ANALYSIS ECONOMIC CONDITIONS ECONOMIC DEVELOPMENT ECONOMIC GROWTH EMPIRICAL RESULTS EXOGENOUS VARIABLES EXPLANATORY VARIABLES FINANCIAL ASSETS FINANCIAL CRISIS FINANCIAL FLOWS FINANCIAL INSTITUTIONS FINANCIAL MARKETS FISCAL YEAR FORECASTS FOREIGN EXCHANGE GDP GDP GLOBAL MARKETS GLOBALIZATION GNP GROWTH PERFORMANCE GROWTH RATE HIGH VOLATILITY INCOME DEVELOPING COUNTRIES INCOME GROUP INCOME LEVELS INDEPENDENT VARIABLES INDUSTRIAL COUNTRIES INFLATION INFLATION RATE INFLATION RATES INTEREST RATES INTERNATIONAL RESERVES LAGGED DEPENDENT LIQUIDITY LOW- INCOME COUNTRIES LOW-INCOME COUNTRIES MACROECONOMIC VARIABLES MATURITIES MIDDLE-INCOME COUNTRIES MORAL HAZARD NEGATIVE EFFECT NEGATIVE SIGN PER CAPITA PER CAPITA INCOME PER CAPITA INCOMES POLICY REFORMS POLICY RESEARCH PORTFOLIO PRIMARY COMMODITIES PRIVATIZATION QUANTITATIVE ANALYSIS RAPID GROWTH REAL EXCHANGE REAL EXCHANGE RATE REAL EXCHANGE RATES REAL INTEREST REAL INTEREST RATE REAL INTEREST RATES REAL PRICES REDUCED FORM EQUATION REGIONAL DISTRIBUTION RELATIVE IMPORTANCE RISING DEMAND RISING TREND SHARP FALL SIGNIFICANT FACTOR Dasgupta, Dipak Ratha, Dilip What Factors Appear to Drive Private Capital Flows to Developing Countries? And How Does Official Lending Respond? |
| relation |
Policy Research Working Paper;No. 2392 |
| description |
The authors study what drives private
capital flows to developing countries, as well as the
apparent response of official lending for the years 1978-97.
Econometric results reveal that non-foreign direct
investment portfolio flows to a country tended to rise in
response to: 1) An increase in the current account deficit.
2) A rise in foreign direct investment flows. 3) Higher per
capita income. 4) Growth performance. Once those variables
were accounted for, private flows did not seem to be
influenced by location, and regional factors. In addition,
private capital flows (whether foreign direct investment or
not) seem to respond positively (with a one-year lag) to
World Bank lending commitments. By far the most important
determinant of official lending to a developing country,
seems to be the external current account balance, or a
change in international reserves in the country. Official
flows - including World Bank lending - appear to have played
a stabilizing (or counter-cyclical) role in response to the
volatility of private capital flows, and fluctuations in
commodity prices, and GDP growth. (The stabilizing effect is
weak, as official flows are only one-tenth of total
long-term flows). |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Dasgupta, Dipak Ratha, Dilip |
| author_facet |
Dasgupta, Dipak Ratha, Dilip |
| author_sort |
Dasgupta, Dipak |
| title |
What Factors Appear to Drive Private Capital Flows to Developing Countries? And How Does Official Lending Respond? |
| title_short |
What Factors Appear to Drive Private Capital Flows to Developing Countries? And How Does Official Lending Respond? |
| title_full |
What Factors Appear to Drive Private Capital Flows to Developing Countries? And How Does Official Lending Respond? |
| title_fullStr |
What Factors Appear to Drive Private Capital Flows to Developing Countries? And How Does Official Lending Respond? |
| title_full_unstemmed |
What Factors Appear to Drive Private Capital Flows to Developing Countries? And How Does Official Lending Respond? |
| title_sort |
what factors appear to drive private capital flows to developing countries? and how does official lending respond? |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2000/07/436951/factors-appear-drive-private-capital-flows-developing-countries-official-lending-respond http://hdl.handle.net/10986/19821 |
| _version_ |
1764441486649196544 |