Non-FDI Capital Inflows in Low-Income Countries: Catching the Wave?

International Financial Flows in Low‐Income Countries

“…However, a longer time period faces the risk of structural changes in the relations between international financial flows and macro‐financial variables for the set of low‐income countries. In addition, international financial flows to low‐income countries were significantly lower in the 1990s (Araujo et al ., ).…”

“…Araujo et al . (,b) provide complementary studies that focus on the time‐series variation in international capital flows for low‐income countries.…”

“…Our sample closely overlaps with the sample examined by Araujo et al . (), with the exceptions that we exclude a small number of island economies that operate as offshore financial centres and a number of ‘fragile’ countries which are disrupted by civil wars and other major political upheavals. Examining various extensions and modifications to the choice of sample is an important item for future research.…”

“…Araujo et al . () provide some evidence on the incidence of capital flow surges for low‐income countries.…”

An Exorbitant Privilege in the First Age of International Financial Integration

“…American firms issued securities in London (portfolio flows) but British investors formed and managed companies in Latin America (which constitutes direct investment). A high share of direct investment in total investment can be an indicator of low trust in local institutions, as analyzed in Hausmann and Fernandez-Arias (2000) and discussed in Araujo et al (2015).…”