Does capital flow from rich to poor countries? We revisit the Lucas paradox and explore the role of capital account restrictions in shaping capital flows at various stages of economic development. We find that, when accounting for the degree of capital account openness, the prediction of the...

This paper applies a probit estimation to assess the relationship between economic takeoffs during 1950- 2000 and inflows of portfolio debt, portfolio equity, and FDI, controlling for country's stock of short-term external debt and commodity terms of trade. Average level of FDI inflows is...

This paper applies a probit estimation to assess the relationship between economic takeoffs during 1950-2000 and inflows of portfolio debt, portfolio equity, and FDI, controlling for country's stock of short-term external debt and commodity terms of trade. Average level of FDI inflows is...

This paper discusses the experience of the EU`s eight new member countries (EU8) between 1995 and 2003 when the bulk of capital account liberalization took place, focusing on interest-rate-sensitive portfolio flows and financial flows. It takes stock of the lessons from capital flow patterns to...

Using a panel data set covering the period 1970-2004 and 96 countries, we provide empirical evidence that the composition of foreign capital, measured by the ratio FDI over total liabilities, has a positive effect on growth, directly and through convergence. Developing countries benefit...

This article critically evaluates the argument that, if developing countries had better institutions and policies and deeper financial markets, they would receive a boost to growth from capital account liberalization. The existing empirical record is ambiguous and leaves unanswered many of the...

This paper is the first to provide firm-level evidence of the effect of capital account liberalization on firms' total factor productivity (TFP) growth. We find that a one standard deviation increase in capital account liberalization is significantly associated with 0.16 to 0.17 standard...

We review the large literature on various economic policies that could help developing economies effectively manage the process of financial globalization. Our central findings indicate that policies promoting financial sector development, institutional quality, and trade openness appear to help...

Understanding the determinants of capital inflows is essential to designing an effective policy framework to manage volatile capital flows and their disruptive potential. This paper aims to identify factors that explain the size and volatility of various types of capital flows to developing Asia...

The objective of this study is to rule on the correlation between liberalization of the capital account and economic growth. We were in particular interested in the channels of foreign direct investment and portfolio investment. Our empirical study was carried out on a sample of 100 developed...