Sudden Stops : Are Global and Local Investors Alike?
The main goal of this paper is to characterize the determinants of sudden stops caused by domestic vis-a-vis foreign residents. Are the decisions of domestic investors to invest abroad or of foreign investors to cut off funds from the domestic econ...
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110214154448 http://hdl.handle.net/10986/3336 |
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okr-10986-3336 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ADVANCED COUNTRIES BALANCE OF PAYMENTS BANK ASSETS BANK CREDIT BANK DEPOSIT BANK DEPOSITS BANK POLICY BANKING CRISES BANKING CRISIS BANKING SYSTEM BOND MARKET BOND MARKET CAPITALIZATION BOND MARKETS BONDS BUDGET SURPLUS BUSINESS CYCLES CAPITAL ACCOUNT CAPITAL ACCOUNT LIBERALIZATION CAPITAL CONTROLS CAPITAL FLIGHT CAPITAL FLOW CAPITAL FLOWS CAPITAL GROWTH CAPITAL INFLOWS CAPITAL MARKET CAPITAL MARKET REFORM CAPITAL MARKETS CAPITAL OUTFLOWS CAPITAL STOCK CENTRAL BANK COMMUNICATION TECHNOLOGY CONSUMER PRICE INDEX CORPORATE GOVERNANCE CREDIT CONSTRAINTS CREDIT GROWTH CURRENCY CURRENCY CRISES CURRENCY CRISIS CURRENCY MISMATCHES CURRENT ACCOUNT CURRENT ACCOUNT BALANCE CURRENT ACCOUNT DEFICITS CURRENT ACCOUNT SURPLUSES DATA AVAILABILITY DEBT DEBT BURDEN DEBT FINANCING DEBT FLOWS DEPOSIT DERIVATIVES DEVELOPING COUNTRIES DOMESTIC CREDIT DOMESTIC CURRENCY DOMESTIC ECONOMY DOMESTIC FINANCIAL MARKETS DOMESTIC INVESTORS ECONOMIC PERFORMANCE EMERGING MARKET EMERGING MARKET ECONOMIES EMERGING MARKETS EQUITY FLOWS EQUITY MARKETS EXCHANGE RATE REGIME EXCHANGE RATE REGIMES EXPORT BASE EXPOSURE EXTERNAL ASSETS EXTERNAL FINANCE EXTERNAL FINANCING FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL DERIVATIVES FINANCIAL DEVELOPMENT FINANCIAL FLOWS FINANCIAL INFLOWS FINANCIAL INFRASTRUCTURE FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL OPENNESS FINANCIAL SECTOR FINANCIAL SECTOR INDICATORS FINANCIAL SECTORS FINANCIAL SERVICES FINANCIAL SHOCKS FINANCIAL SYSTEM FISCAL DEFICITS FISCAL POLICIES FISCAL POLICY FLEXIBLE EXCHANGE RATE FLOWS OF CAPITAL FOREIGN ASSETS FOREIGN BANK FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN EQUITIES FOREIGN FINANCING FOREIGN INTEREST FOREIGN INVESTORS FOREIGN PORTFOLIO FOREIGN PORTFOLIO INVESTMENT GLOBAL CAPITAL GLOBAL CAPITAL FLOWS GLOBAL ECONOMY GLOBAL INVESTORS GLOBALIZATION GOVERNMENT BUDGET GOVERNMENT EXPENDITURE GROWTH RATE GROWTH RATES HIGH INFLATION INCOME INCOME LEVELS INDEBTED COUNTRIES INDUSTRIAL COUNTRIES INFLATION INFLATION RATE INFORMATION ASYMMETRIES INFRASTRUCTURE PROJECTS INSURANCE INTEREST RATE INTEREST RATES INTERNATIONAL BANK INTERNATIONAL BORROWING INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL MARKETS INTERNATIONAL CREDIT INTERNATIONAL ECONOMICS INTERNATIONAL ECONOMIES INTERNATIONAL FINANCIAL INTEGRATION INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL INVESTMENTS INTERNATIONAL MARKETS INTERNATIONAL RESERVES INVESTMENT CLIMATE INVESTMENT FLOWS LIABILITY LIQUID ASSETS LIQUIDITY LOCAL CAPITAL MARKETS LOCAL FINANCIAL MARKETS LOCAL INVESTORS MACROECONOMIC MISMANAGEMENT MACROECONOMIC PERFORMANCE MACROECONOMIC POLICIES MACROECONOMIC POLICY MACROECONOMIC STABILITY MACROECONOMIC VULNERABILITY MICRO DATA MIDDLE-INCOME COUNTRIES MONETARY FUND MONETARY POLICY MONETARY STABILITY MONEY MARKET MONEY MARKET RATE NATURAL RESOURCE NATURAL RESOURCES NET CAPITAL NET DEBT NON-PERFORMING LOANS OUTPUT POLICY RESPONSES PORTFOLIO PORTFOLIO INFLOWS PORTFOLIO INVESTMENT PORTFOLIOS POSITIVE COEFFICIENT PRICE STABILITY PRIVATE BOND PRIVATE CAPITAL PRIVATE CAPITAL INFLOWS PRIVATE CREDIT PRIVATE SECTOR FINANCE PUSH FACTORS RATE OF GROWTH REAL ECONOMIC ACTIVITY REAL EXCHANGE RATE REAL EXCHANGE RATES REAL INTEREST REAL INTEREST RATE REGULATORY CAPITAL REGULATORY FRAMEWORKS RESERVE RESERVE ACCUMULATION RESERVES RETURN RETURNS RISK AVERSION SAVINGS SECURITIES SMALL COUNTRIES STOCK MARKET STOCK MARKET CAPITALIZATION STOCKS T-BILLS TAX TAX SYSTEMS TRADE BALANCE TRADING TREASURY TREASURY BILLS VOLATILITY WORLD DEVELOPMENT INDICATORS WORLD INTEREST RATE WORLD MARKET |
| spellingShingle |
ADVANCED COUNTRIES BALANCE OF PAYMENTS BANK ASSETS BANK CREDIT BANK DEPOSIT BANK DEPOSITS BANK POLICY BANKING CRISES BANKING CRISIS BANKING SYSTEM BOND MARKET BOND MARKET CAPITALIZATION BOND MARKETS BONDS BUDGET SURPLUS BUSINESS CYCLES CAPITAL ACCOUNT CAPITAL ACCOUNT LIBERALIZATION CAPITAL CONTROLS CAPITAL FLIGHT CAPITAL FLOW CAPITAL FLOWS CAPITAL GROWTH CAPITAL INFLOWS CAPITAL MARKET CAPITAL MARKET REFORM CAPITAL MARKETS CAPITAL OUTFLOWS CAPITAL STOCK CENTRAL BANK COMMUNICATION TECHNOLOGY CONSUMER PRICE INDEX CORPORATE GOVERNANCE CREDIT CONSTRAINTS CREDIT GROWTH CURRENCY CURRENCY CRISES CURRENCY CRISIS CURRENCY MISMATCHES CURRENT ACCOUNT CURRENT ACCOUNT BALANCE CURRENT ACCOUNT DEFICITS CURRENT ACCOUNT SURPLUSES DATA AVAILABILITY DEBT DEBT BURDEN DEBT FINANCING DEBT FLOWS DEPOSIT DERIVATIVES DEVELOPING COUNTRIES DOMESTIC CREDIT DOMESTIC CURRENCY DOMESTIC ECONOMY DOMESTIC FINANCIAL MARKETS DOMESTIC INVESTORS ECONOMIC PERFORMANCE EMERGING MARKET EMERGING MARKET ECONOMIES EMERGING MARKETS EQUITY FLOWS EQUITY MARKETS EXCHANGE RATE REGIME EXCHANGE RATE REGIMES EXPORT BASE EXPOSURE EXTERNAL ASSETS EXTERNAL FINANCE EXTERNAL FINANCING FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL DERIVATIVES FINANCIAL DEVELOPMENT FINANCIAL FLOWS FINANCIAL INFLOWS FINANCIAL INFRASTRUCTURE FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL OPENNESS FINANCIAL SECTOR FINANCIAL SECTOR INDICATORS FINANCIAL SECTORS FINANCIAL SERVICES FINANCIAL SHOCKS FINANCIAL SYSTEM FISCAL DEFICITS FISCAL POLICIES FISCAL POLICY FLEXIBLE EXCHANGE RATE FLOWS OF CAPITAL FOREIGN ASSETS FOREIGN BANK FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN EQUITIES FOREIGN FINANCING FOREIGN INTEREST FOREIGN INVESTORS FOREIGN PORTFOLIO FOREIGN PORTFOLIO INVESTMENT GLOBAL CAPITAL GLOBAL CAPITAL FLOWS GLOBAL ECONOMY GLOBAL INVESTORS GLOBALIZATION GOVERNMENT BUDGET GOVERNMENT EXPENDITURE GROWTH RATE GROWTH RATES HIGH INFLATION INCOME INCOME LEVELS INDEBTED COUNTRIES INDUSTRIAL COUNTRIES INFLATION INFLATION RATE INFORMATION ASYMMETRIES INFRASTRUCTURE PROJECTS INSURANCE INTEREST RATE INTEREST RATES INTERNATIONAL BANK INTERNATIONAL BORROWING INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL MARKETS INTERNATIONAL CREDIT INTERNATIONAL ECONOMICS INTERNATIONAL ECONOMIES INTERNATIONAL FINANCIAL INTEGRATION INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL INVESTMENTS INTERNATIONAL MARKETS INTERNATIONAL RESERVES INVESTMENT CLIMATE INVESTMENT FLOWS LIABILITY LIQUID ASSETS LIQUIDITY LOCAL CAPITAL MARKETS LOCAL FINANCIAL MARKETS LOCAL INVESTORS MACROECONOMIC MISMANAGEMENT MACROECONOMIC PERFORMANCE MACROECONOMIC POLICIES MACROECONOMIC POLICY MACROECONOMIC STABILITY MACROECONOMIC VULNERABILITY MICRO DATA MIDDLE-INCOME COUNTRIES MONETARY FUND MONETARY POLICY MONETARY STABILITY MONEY MARKET MONEY MARKET RATE NATURAL RESOURCE NATURAL RESOURCES NET CAPITAL NET DEBT NON-PERFORMING LOANS OUTPUT POLICY RESPONSES PORTFOLIO PORTFOLIO INFLOWS PORTFOLIO INVESTMENT PORTFOLIOS POSITIVE COEFFICIENT PRICE STABILITY PRIVATE BOND PRIVATE CAPITAL PRIVATE CAPITAL INFLOWS PRIVATE CREDIT PRIVATE SECTOR FINANCE PUSH FACTORS RATE OF GROWTH REAL ECONOMIC ACTIVITY REAL EXCHANGE RATE REAL EXCHANGE RATES REAL INTEREST REAL INTEREST RATE REGULATORY CAPITAL REGULATORY FRAMEWORKS RESERVE RESERVE ACCUMULATION RESERVES RETURN RETURNS RISK AVERSION SAVINGS SECURITIES SMALL COUNTRIES STOCK MARKET STOCK MARKET CAPITALIZATION STOCKS T-BILLS TAX TAX SYSTEMS TRADE BALANCE TRADING TREASURY TREASURY BILLS VOLATILITY WORLD DEVELOPMENT INDICATORS WORLD INTEREST RATE WORLD MARKET Calderón, César Kubota, Megumi Sudden Stops : Are Global and Local Investors Alike? |
| geographic_facet |
The World Region The World Region |
| relation |
Policy Research working paper ; no. WPS 5569 |
| description |
The main goal of this paper is to
characterize the determinants of sudden stops caused by
domestic vis-a-vis foreign residents. Are the decisions of
domestic investors to invest abroad or of foreign investors
to cut off funds from the domestic economy governed by the
same set of determinants? Given the distribution of
different types of sudden stop episodes over time and its
different macroeconomic consequences, the authors argue that
the determinants may not be alike. Using an effective sample
of 82 countries with annual information over the period
1970-2007, the analysis finds that global investors are less
likely to stop bringing their capital when their economy is
growing and the world interest rate is lower. Domestic
agents are more willing to invest abroad if the
macroeconomic performance of the domestic economy is poor
(high inflation), the financial system is weak, and there
are high external savings (current account surpluses).
Increasing financial openness makes the domestic country
more vulnerable to sudden stops caused by either local or
global investors. Finally, countries with higher shares of
foreign direct investment are less prone to inflow-driven
sudden stops, whereas the opposite holds for outflow-driven
sudden stops. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Calderón, César Kubota, Megumi |
| author_facet |
Calderón, César Kubota, Megumi |
| author_sort |
Calderón, César |
| title |
Sudden Stops : Are Global and Local Investors Alike? |
| title_short |
Sudden Stops : Are Global and Local Investors Alike? |
| title_full |
Sudden Stops : Are Global and Local Investors Alike? |
| title_fullStr |
Sudden Stops : Are Global and Local Investors Alike? |
| title_full_unstemmed |
Sudden Stops : Are Global and Local Investors Alike? |
| title_sort |
sudden stops : are global and local investors alike? |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110214154448 http://hdl.handle.net/10986/3336 |
| _version_ |
1764386815931842560 |
| spelling |
okr-10986-33362021-04-23T14:02:08Z Sudden Stops : Are Global and Local Investors Alike? Calderón, César Kubota, Megumi ADVANCED COUNTRIES BALANCE OF PAYMENTS BANK ASSETS BANK CREDIT BANK DEPOSIT BANK DEPOSITS BANK POLICY BANKING CRISES BANKING CRISIS BANKING SYSTEM BOND MARKET BOND MARKET CAPITALIZATION BOND MARKETS BONDS BUDGET SURPLUS BUSINESS CYCLES CAPITAL ACCOUNT CAPITAL ACCOUNT LIBERALIZATION CAPITAL CONTROLS CAPITAL FLIGHT CAPITAL FLOW CAPITAL FLOWS CAPITAL GROWTH CAPITAL INFLOWS CAPITAL MARKET CAPITAL MARKET REFORM CAPITAL MARKETS CAPITAL OUTFLOWS CAPITAL STOCK CENTRAL BANK COMMUNICATION TECHNOLOGY CONSUMER PRICE INDEX CORPORATE GOVERNANCE CREDIT CONSTRAINTS CREDIT GROWTH CURRENCY CURRENCY CRISES CURRENCY CRISIS CURRENCY MISMATCHES CURRENT ACCOUNT CURRENT ACCOUNT BALANCE CURRENT ACCOUNT DEFICITS CURRENT ACCOUNT SURPLUSES DATA AVAILABILITY DEBT DEBT BURDEN DEBT FINANCING DEBT FLOWS DEPOSIT DERIVATIVES DEVELOPING COUNTRIES DOMESTIC CREDIT DOMESTIC CURRENCY DOMESTIC ECONOMY DOMESTIC FINANCIAL MARKETS DOMESTIC INVESTORS ECONOMIC PERFORMANCE EMERGING MARKET EMERGING MARKET ECONOMIES EMERGING MARKETS EQUITY FLOWS EQUITY MARKETS EXCHANGE RATE REGIME EXCHANGE RATE REGIMES EXPORT BASE EXPOSURE EXTERNAL ASSETS EXTERNAL FINANCE EXTERNAL FINANCING FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL DERIVATIVES FINANCIAL DEVELOPMENT FINANCIAL FLOWS FINANCIAL INFLOWS FINANCIAL INFRASTRUCTURE FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL OPENNESS FINANCIAL SECTOR FINANCIAL SECTOR INDICATORS FINANCIAL SECTORS FINANCIAL SERVICES FINANCIAL SHOCKS FINANCIAL SYSTEM FISCAL DEFICITS FISCAL POLICIES FISCAL POLICY FLEXIBLE EXCHANGE RATE FLOWS OF CAPITAL FOREIGN ASSETS FOREIGN BANK FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN EQUITIES FOREIGN FINANCING FOREIGN INTEREST FOREIGN INVESTORS FOREIGN PORTFOLIO FOREIGN PORTFOLIO INVESTMENT GLOBAL CAPITAL GLOBAL CAPITAL FLOWS GLOBAL ECONOMY GLOBAL INVESTORS GLOBALIZATION GOVERNMENT BUDGET GOVERNMENT EXPENDITURE GROWTH RATE GROWTH RATES HIGH INFLATION INCOME INCOME LEVELS INDEBTED COUNTRIES INDUSTRIAL COUNTRIES INFLATION INFLATION RATE INFORMATION ASYMMETRIES INFRASTRUCTURE PROJECTS INSURANCE INTEREST RATE INTEREST RATES INTERNATIONAL BANK INTERNATIONAL BORROWING INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL MARKETS INTERNATIONAL CREDIT INTERNATIONAL ECONOMICS INTERNATIONAL ECONOMIES INTERNATIONAL FINANCIAL INTEGRATION INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL INVESTMENTS INTERNATIONAL MARKETS INTERNATIONAL RESERVES INVESTMENT CLIMATE INVESTMENT FLOWS LIABILITY LIQUID ASSETS LIQUIDITY LOCAL CAPITAL MARKETS LOCAL FINANCIAL MARKETS LOCAL INVESTORS MACROECONOMIC MISMANAGEMENT MACROECONOMIC PERFORMANCE MACROECONOMIC POLICIES MACROECONOMIC POLICY MACROECONOMIC STABILITY MACROECONOMIC VULNERABILITY MICRO DATA MIDDLE-INCOME COUNTRIES MONETARY FUND MONETARY POLICY MONETARY STABILITY MONEY MARKET MONEY MARKET RATE NATURAL RESOURCE NATURAL RESOURCES NET CAPITAL NET DEBT NON-PERFORMING LOANS OUTPUT POLICY RESPONSES PORTFOLIO PORTFOLIO INFLOWS PORTFOLIO INVESTMENT PORTFOLIOS POSITIVE COEFFICIENT PRICE STABILITY PRIVATE BOND PRIVATE CAPITAL PRIVATE CAPITAL INFLOWS PRIVATE CREDIT PRIVATE SECTOR FINANCE PUSH FACTORS RATE OF GROWTH REAL ECONOMIC ACTIVITY REAL EXCHANGE RATE REAL EXCHANGE RATES REAL INTEREST REAL INTEREST RATE REGULATORY CAPITAL REGULATORY FRAMEWORKS RESERVE RESERVE ACCUMULATION RESERVES RETURN RETURNS RISK AVERSION SAVINGS SECURITIES SMALL COUNTRIES STOCK MARKET STOCK MARKET CAPITALIZATION STOCKS T-BILLS TAX TAX SYSTEMS TRADE BALANCE TRADING TREASURY TREASURY BILLS VOLATILITY WORLD DEVELOPMENT INDICATORS WORLD INTEREST RATE WORLD MARKET The main goal of this paper is to characterize the determinants of sudden stops caused by domestic vis-a-vis foreign residents. Are the decisions of domestic investors to invest abroad or of foreign investors to cut off funds from the domestic economy governed by the same set of determinants? Given the distribution of different types of sudden stop episodes over time and its different macroeconomic consequences, the authors argue that the determinants may not be alike. Using an effective sample of 82 countries with annual information over the period 1970-2007, the analysis finds that global investors are less likely to stop bringing their capital when their economy is growing and the world interest rate is lower. Domestic agents are more willing to invest abroad if the macroeconomic performance of the domestic economy is poor (high inflation), the financial system is weak, and there are high external savings (current account surpluses). Increasing financial openness makes the domestic country more vulnerable to sudden stops caused by either local or global investors. Finally, countries with higher shares of foreign direct investment are less prone to inflow-driven sudden stops, whereas the opposite holds for outflow-driven sudden stops. 2012-03-19T18:00:33Z 2012-03-19T18:00:33Z 2011-02-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110214154448 http://hdl.handle.net/10986/3336 English Policy Research working paper ; no. WPS 5569 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region |