Impact Of International Capital Flows Research Articles

International capital flows and sustainable development goals: The role of governance and ICT diffusion

Achieving the Sustainable Development Goals (SDGs) in developing economies, especially in sub-Saharan Africa (SSA), has become a focal point of discussion. This study contributes to this discourse by investigating the effects of international capital flows on SDGs in SSA, with a specific focus on the moderating mechanisms that influence these effects. Using data from 41 SSA countries spanning 2000 to 2018, the findings emphasize the crucial role of governance quality and ICT diffusion as effective factors moderating the nexus between international capital flows and SDGs. The study reveals a nuanced impact of international capital flows on sustainable development, encompassing both positive and negative effects across economic, social, and environmental dimensions. However, the presence of good governance practices and widespread diffusion of information and communication technologies (ICTs) serves as crucial conditional factors, enhancing the positive effects of international capital flows on economic and social sustainability while simultaneously mitigating their potential adverse effects on environmental sustainability. Through improvements in governance structures and the promotion of ICT diffusion, policymakers can create an environment conductive to maximizing the benefits of international capital flows while minimizing their adverse repercussions, thereby fostering sustainable development in sub-Saharan Africa.

Extreme risk spillovers between US and Chinese agricultural futures markets in crises: A dependence-switching copula-CoVaR model.

The linkages between the US and China, the world's two major agricultural powers, have brought great uncertainty to the global food markets. Inspired by these, this paper examines the extreme risk spillovers between US and Chinese agricultural futures markets during significant crises. We use a copula-conditional value at risk (CoVaR) model with Markov-switching regimes to capture the tail dependence in their pair markets. The study covers the period from January 2006 to December 2022 and identifies two distinct dependence regimes (stable and crisis periods). Moreover, we find significant and asymmetric upside/downside extreme risk spillovers between the US and Chinese markets, which are highly volatile in crises. Additionally, the impact of international capital flows (the financial channel) on risk spillovers is particularly pronounced during the global financial crisis. During the period of the COVID-19 pandemic and the Russia-Ukraine 2022 war, the impact of supply chain disruptions (the non-financial channel) is highlighted. Our findings provide a theoretical reference for monitoring the co-movements in agricultural futures markets and practical insights for managing investment portfolios and enhancing food market stability during crises.

The impact of international capital flows on the economic growth in Algeria during the period 1990-20

This study examined the effect of international capital flows on economic growth in Algeria for the period, 1990 to 2018. This study relied on four core channels of international capital flows which includes foreign direct investment (FDI), official development assistance (ODA), personal remittances (REM), and external debt stock (EXTDS) into Algeria. We found that all channels of international capital flows were not statistically significant in the short and long-run except the foreign direct investment.We result from this study that Algeria needs deep reforms in order to attract more foreign capital, especially creating an appropriate environment In order for these flows to contribute substantially to economic growth.
 L'étude a examiné l'effet des entrées de capitaux internationaux sur la croissance économique de l'Algérie pour les périodes 1990 à 2018. L'étude a utilisé quatre principaux canaux d'entrées de capitaux internationaux, qui comprennent l'investissement direct étranger (IDE), l'aide publique au développement (APD), les envois de fonds personnels (REM) et le stock de dette extérieure (EXTDS) en Algérie.Nous avons constaté que tous les résultats n'étaient pas statistiquement significatifs à court et à long terme, à l'exception de l'investissement étranger direct.Nous avons appris de cette étude que l'Algérie a besoin de réformes profondes afin d'attirer plus de capitaux étrangers, en particulier en créant un environnement approprié pour que ces flux contribuent de manière substantielle à la croissance économique.

Evaluating the symmetric and asymmetric effects of fossil fuel energy consumption and international capital flows on environmental sustainability: a case of South Asia.

South Asia is primarily affected by environmental degradation. As a result, it is worthwhile to explore the impact of international capital flows on the ecological sustainability of the South Asian region. There are many studies in the literature on the CO2-remittances nexus, CO2-FDI nexus, and CO2-economic growth; however, no study has yet taken remittances and FDI into account in the symmetric and asymmetric model for the South Asian region. To address the research gap, this study investigates the effect of international capital flows, fossil fuel energy consumption, and economic growth on South Asian carbon emissions. This study examines the effect of fossil fuel energy consumption, remittances, foreign direct investment, and economic growth on the environmental sustainability of the South Asian region from 1975 to 2020. Autoregressive distributive lag (ARDL) and non-linear ARDL (NARDL) models are used to estimate the symmetrical and asymmetrical relationships among the variables. The findings of the ARDL models reveal that fossil fuel energy consumption and economic growth increase while remittances and FDI decrease carbon dioxide (CO2) in the long run. According to the NARDL empirical findings, positive remittances and negative FDI shock reduce CO2. Besides, the positive and negative fossil fuel energy consumption shock increases CO2. Moreover, the positive (negative) economic growth shock increases (decreases) CO2. The cumulative dynamic multipliers revealed the adjustment pattern to new long-run equilibria. The study recommends that policymakers regard remittances and FDI as policy instruments, particularly when developing long-term strategies and policies connected to environmental quality.

An Impact of International Capital Flows on European Union Countries’ Savings, Investments, Consumption, and Current Accounts in the Frame of Pandemic

An Impact of International Capital Flows on European Union Countries’ Savings, Investments, Consumption, and Current Accounts in the Frame of Pandemic

The Impact of International Capital Flows on Economic Growth in Palestine

The study aims to investigate and examine the impact of International Capital Flows and other Financial Flows on Economic Growth in Palestine during the period (2007-2018). This study also included trends and methods of forming Capital Flows and Financial Capital Flows. The study used the appropriate descriptive and analytical approach by the authors for the purposes and requirements of the research to investigate the real results and required. The researchers used the time intervals method, and the study concluded that Foreign Direct Investment (FDI), Foreign Portfolio Investment (FPI), Large Loans (World Bank), Worker Remittances (WR), Foreign Affairs Borrowing and Financial Grants (GR) have a noticeable positive impact on Economic Growth in Palestine. The study made several important and useful recommendations, the most notably: That Palestinian Government must lay down and establish lighter and comfortable rules and regulations for investors to attract more investors and Foreign Investments to Palestine. Besides, the Palestinian Government must work hard side by side with the other Developed Countries for reaching better Economic Development and increasing a good rate. To achieve a good rate of Economic Growth, the government must work hard to create job opportunities for citizens to reduce the high Unemployment rate in the country. The Government should improve the standard of living and competitiveness in global markets and obtain a sufficient share in the International Financial Markets, so the Government must work to provide new opportunities for Global Markets Integration by creating a good environment to increase Economic Growth and Technology Development.

The Impact of International Capital Flows on Central and Eastern European Countries’ Investments, Savings, Consumption, and Current Accounts

Capital flows have been analysed from various perspectives and yet no consensus has been reached about the impact of international capital flows on national economies. The main aim of this paper is to present the theoretical aspects of the effect of international capital flows on national economies, and to analyse the impact of international capital flows on Central and Eastern European (CEE) countries’ domestic savings, investments, consumption, and current accounts. During the investigation, the latest studies on international capital flows were reviewed and systemised, 11 CEE countries’ main indicators from across a 10-years period were collected, and computed coefficients, which represent the change associated with a variation in clusters’ capital inflows, equal to 1 percent change of GDP, were analysed. The analyses conducted show that capital flows have an impact on countries’ economies. The main findings are: first, domestic savings and consumption are seen to have been more strongly associated with capital inflows than investments in developed countries. Second, the relationship between investments, domestic savings, consumption and one inflow in portfolio flows would be negative, in both highly developed countries and emerging market countries. Third, where positive inflows in net and gross capital are concerned, foreign direct investments would have an insignificant positive impact on current accounts in highly developed countries and developed countries but a negative impact in emerging market countries. By achieving economic growth dynamics within a specific country, a wide evaluation of a country’s capital flows can be performed, and control of capital flows gained, by applying different assessment models.

Cross-border capital flows and bank risk-taking

This paper explores the impact of cross-border capital flows on bank lending volumes and risk. Employing bank-level data from the euro area, we show that capital inflows are associated with higher bank credit supply and lower average loan quality. By showing that the lending patterns of smaller domestic banks are also affected, we present evidence that the impact of international capital flows is not limited to large banks with international exposure. Nevertheless, the observed effects are stronger for large banks as well as for banks with low levels of capitalisation, suggesting that agency issues reinforce the link between capital flows and bank lending.

The Impact of International Capital Flows on Jordan’s Economic Growth

The aim of this study is to examine the impact of international capital flows on the economic growth in Jordan during the period from 2005 to 2017, The study also examines trends and composition of capital inflows. The study used descriptive analytical research method which was appropriate for the purpose of research. By using time series data, the study found that Foreign Direct Investment (FDI), foreign portfolio investment (FPI), grants (Gr) and Worker remittances (WR) are positively affecting the economic growth direct contribution. Based on the research results, the study came with a several recommendations, the most important recommendation is; the government of Jordan should create and relax the rules and regulations to attract more investors, and also the government should work hand in hand with the developed countries to create economic and employment opportunities, improve the country’s competitiveness, and expand growth within the private sector so that everyone in Jordan has the opportunity to contribute to a brighter future.

Uluslararası Sermaye Hareketlerinin Firma Performansına Etkisi: Türkiye Örneği

In the globalizing world, the impact of international capital flows on the economies is increasing day by day. Firms, the smallest units in the economy, are directly affected by developments. The purpose of this study is to examine the effect of international capital flows on firm performance. The study, using panel data analysis, covers 120 companies in the Stock Exchange Istanbul (BIST) Industrial Production Index in the 2004-2015 period. Two models have been developed with ROA and ROE as dependent variables, which are selected as company performance measures. According to the general results of the study with employing Swamy's random coefficient model: the ratios of the direct foreign capital flows to GDP and the portfolio investments to GDP are not statistically significant on firm profitability; and it has been conducted that the ratios of other investments and short-term foreign capital flow to GDP have an effect on the profitability of the firms. The findings include also eight sub-sectors results in the manufacturing industry.

Capital Flows and Financial Stability in Emerging Economies

There is mixed evidence for the impact of international capital flows on financial sector's stability. This paper investigates the relationship between components of gross capital flows and various financial stability indicators for 16 emerging and newly industrialized economies. Departing from panel data methods, for each financial stability proxy, we employ systems of seemingly unrelated regression estimators to allow variation in the estimated relationship across countries, while permitting cross- equation restrictions to be imposed within a country. The findings suggest that, after controlling for macroeconomic factors, there are significant effects of different gross capital flow measures on the financial stability proxies. However, the effects are not homogeneous across our sample economies and across flows. Country-specific financial and macroeconomic characteristics help to explain some of these differences.

An impact of international capital flows on economic security of emerging markets

An impact of international capital flows on economic security of emerging markets

10 Years after the Global Financial Crisis: What Have We Learnt About International Capital Flows?

Making the most of international capital flows by allowing countries to reap their benefits while reducing associated risks has always been a challenge and has led to considerable economic research over the past 30 years. This challenge became even more acute following the Global Financial Crisis, as new concerns emerged related to the complexity of global financial relations, their role in shock transmission as well as how to protect countries from financial instability. Against this background, recent research has focussed on understanding better the implications of financial globalization for economic stability and the design of policies. This literature review takes stock of these recent developments including the discussion on the risks associated with corporate foreign indebtedness, the role of the global financial cycle in driving financial instability, new findings on the real impact of international capital flows and ongoing debates on the role of capital controls.

Impact of International capital flows on emerging markets’ sovereign risk premium – demand vs. vulnerability effect

In recent years many developing economies attracted significant foreign capital. An increased share of non-residents in public debt affects sovereign bond yields in two opposing ways: triggering a downward pressure on yields in reaction to increased demand, and an upward pressure reflective of overreliance on external funding and greater vulnerability to sudden stops of capital inflows. Based on panel cointegration analysis of 14 emerging economies, this study – contrary to previous empirical literature – indicates that in the long run the positive-signed vulnerability effect may prevail over the negative-signed demand effect, though with significant heterogeneity across countries.

The Impossible Trinity: Inflation Targeting, Exchange Rate Management and Open Capital Accounts in Emerging Economies

ABSTRACTThis article contributes to the debate on macroeconomic management and capital account regulations in developing and emerging countries (DECs). It argues that the recommendation by neoclassical economists and international financial institutions (IFIs) to combine an inflation‐targeting regime with exchange rate management, whilst maintaining open capital accounts, is not only impossible but also potentially counterproductive. The article draws on extensive semi‐structured interviews with currency traders in Brazil and London to show that this is due to the particular way such a regime shapes central bank interventions in the money and foreign exchange markets and the destabilizing way these interventions interact with financial market expectations. The interview results also demonstrate that the guidelines issued by IFIs actually undermine, rather than aid, DEC central banks’ initial attempts to manage excessive exchange rate movements. These results support the long‐standing argument by heterodox economists and critical international political economists that DECs need to make the exchange rate an explicit instrument and goal of their macroeconomic policy and complement it with comprehensive capital account regulations to reduce the destabilizing impact of international capital flows. The interview results also give some concrete suggestions on how to achieve this.

The Impact of International Capital Flows on Economic Growth: The Case of Vietnam

The Impact of International Capital Flows on Economic Growth: The Case of Vietnam

International capital flows, the domestic employment and wages

PurposeThe purpose of this paper is to explore in depth the impact and transmission mechanism of different international capital flows on domestic employment and wages in China within a systematic framework; also to reveal whether the empirical results can confirm the basic model inferences.Design/methodology/approachUsing dynamic economic model and empirical experiment, this study designs and conducts the analysis within a systematic framework. The authors acquire the needed and credible empirical data.FindingsThe international capital inflows will increase the average wage level, and the international capital outflows will significantly reduce the level of domestic wages. The unofficially recorded capital flows would appear negatively related to the domestic wages. Due to the complexities of relevant elements, the impact of different international capital flows on domestic employment is of insignificance. It is noteworthy that the impact of international capital flows on the average wage changes of different provinces will tend to converge to a certain extent.Practical implicationsThe results have reflected that the capital flows between the different provinces have no obvious frictions and barriers.Originality/valueThe paper explores in depth the impact and transmission mechanism of different international capital flows on domestic employment and wages within a systematic framework. The empirical analysis related to the China different provinces is an exploratory experiment.

Impact of international capital flows on real estate market: The empirical test in China from 1998 to 2006

Taking the inflation into consideration and making use of the quarter data of the actual foreign investment, housing and land prices in China from 1998 to 2006, this paper examines the relationship between housing prices and international capital flows using Error Correction Model (ECM) and Granger causality test. Results show that in the short run, the increase of housing prices attracts the inflow of foreign capitals; in the long run, foreign capitals help to boost the rise of housing prices. Therefore, at present, Chinese government must impose effective restrictions on the flow of foreign capital into the real estate market.

International Capital Flows and Growth in India: The Recent Experience

Capital flows are most helpful when the magnitude of those flows is steady and stable. The international capital flow such as direct and portfolio flows has huge contribution to influence the economic behavior of the countries positively. Countries with well developed financial markets gain significantly from Foreign Direct Investment (FDI). The huge volume of capital flows and their influence on the domestic financial markets, understanding the behaviour of the flows becomes very important especially at time liberalizing the capital account. The study attempts to examine the impact of international capital flows on economic growth. The study also examines trends and composition of capital inflows, changing pattern capital flows in view of economic reform, ascertain the impact of domestic financial policy variables on international capital flows and suggest policy implication thereof. By using monthly time series data, we found that Foreign Direct Investment (FDI) is positively affecting the economic growth direct contribution, while Foreign Institutional Investment (FII) is negatively affecting the growth alb its, in a small way and make a preliminary attempt to test whether the international capital flows has positive impact on financial markets and economic growth. The empirical analysis using the time series data between April 1995 to April 2007 shows that FDI plays unambiguous role in contributing to economic growth.

International Capital Flows: Identifying the Gender Dimension

This paper explores the main issues involved in examining the gender impact of international capital flows to developing countries. It argues that at the macroeconomic level women lose more than men from slow and/or unstable economic growth, financial crises and meltdowns, and even more so the longer and deeper the economic downturn because, without a social security system, the family and women have many additional burdens. Women should formulate an agenda of their own with respect to international monetary reform and some proposals are outlined in this respect, including those involving capital controls.