WHAT DRIVES CAPITAL FLOWS TO EMERGING MARKETS? A SURVEY OF THE EMPIRICAL LITERATURE

By R. Koepke. Journal of economic surveys (Print), 2018

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This paper reviews the rapidly growing empirical literature on the drivers of capital flows to emerging markets. The empirical evidence is structured based on the recognition that the drivers of capital flows vary over time and across different types of capital flows. The drivers are classified using the traditional “push vs. pull” framework, which is augmented by a distinction between cyclical and structural factors. Push factors are found to matter most for portfolio flows, somewhat less for banking flows, and least for FDI. Pull factors matter for all three components, but most for banking flows. A historical perspective suggests that the recent literature may have overemphasized the importance of cyclical factors at the expense of longer-term structural trends.

Subfields: Economics and Econometrics, Finance, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/b8fc80f38247d6f87d830f85ebe91669dc6f5c49

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Citations in the corpus

How Important is the Global Financial Cycle? Evidence from Capital Flows (2017, methodology): “29 Miranda Agrippino and Rey use monthly data in a dynamic factor model for over 800 risky assets between 1990 and 2012; we simply average their monthly factors to derive quarterly factors.”
The shifting drivers of global liquidity (2020, background): “Cetorelli and Goldberg (2012b) show bank transmission through internal capital markets and heterogeneity in shock transmission to countries depending on their global bank-specific importance in lending and funding 1 See Koepke (2015) for a comprehensive summary of the literature in the drivers of ca”