International gross capital flows: New uses of balance of payments data and application to financial crises

PurposeThis study empirically examines the effect of capital controls on the volume and composition of capital flows at aggregated as well as at disaggregated level by different asset classes such as debt, FDI, equity, and derivatives.Design/methodology/approachSeveral dynamic panel SYS-GMM models are employed on two sets of unique data on cross-border capital flows and capital control index along with control variables at aggregated and disaggregated level by different asset classes during 1995–2015 for a sample of 31 Asian economies.FindingsEconometric findings suggest that higher capital controls effectively reduce gross capital flows. The reduction in gross capital flows is largely found to be on account of effectiveness of controls on equity flows. However, the impact of controls on overall debt and derivative flows is found to be insignificant. Further, it was found that an increase in direct capital controls disaggregated by inflow and outflow categories significantly reduced the inflow of debt and equity + FDI flows and outflow of equity + FDI and derivative flows. Finally, the study did not find any substitution effect (due to indirect controls) and net effect on capital flows.Practical implicationsResults of such empirical examination may enable governments in respective countries to pursue prudent and rational capital controls as a shield against capital flight and shock transmission.Social implicationsPreventing capital flight through effective controls has macroeconomic benefits such as maintaining stability in income, growth, interest rate, exchange rate, and employment levels for the society.Originality/valueThe primary contribution of the study is the analysis of effectiveness of capital controls disaggregated by different asset categories such as debt, equity, FDI, and derivatives using two unique recent data sets for a large sample of Asian economies.

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Gross Capital Flows: Dynamics and Crises

SSRN Electronic Journal ◽

10.2139/ssrn.1825011 ◽

2011 ◽

Cited By ~ 1

Author(s):

Fernando A. Broner ◽

Tatiana Didier ◽

Aitor Erce ◽

Sergio L. Schmukler

Keyword(s):

Capital Flows ◽

Gross Capital Flows

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A Balance of Payments for the Thirteen Colonies, 1768–1772: A Summary

The Journal of Economic History ◽

10.1017/s0022050700058538 ◽

1965 ◽

Vol 25 (4) ◽

pp. 691-695 ◽

Cited By ~ 5

Author(s):

James Shepherd

Keyword(s):

Great Britain ◽

Capital Flows ◽

West Indies ◽

Balance Of Payments ◽

Large Share ◽

Commodity Trade ◽

The West ◽

Colonial Economy ◽

Total Market

Any advance in our knowledge about the growth and development of the American colonial economy must first start with a balance-of-payments study. The trade of the thirteen colonies with other areas— principally Great Britain, Ireland, southern Europe, the Wine Islands, the West Indies, and Africa—certainly must have formed, together with the coastal trade between the colonies, a large share of the total market activity. My conclusions from such a study are that the description given of commodity trade by colonial historians has been accurate but that once services as well as goods are considered the picture changes to one where there are only small positive or negative balances remaining on current account for the various regions. As a result, I would conclude that long-term capital flows from Great Britain to the colonies were either small or nil during this period.

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