The DOI matches its Crossref record; 20 of the 20 references it cites were found in a registry or an index.
Foreign Capital and Economic Growth
Open accessAbstract
We document the recent phenomenon of uphill flows of capital from nonindustrial to industrial countries and analyze whether this pattern of capital flows has hurt growth in nonindustrial economies that export capital. Surprisingly, we find that there is a positive correlation between current account balances and growth among nonindustrial countries, implying that a reduced reliance on foreign capital is associated with higher growth. This result is weaker when we use panel data rather than cross-sectional averages over long periods of time, but in no case do we find any evidence that an increase in foreign capital inflows directly boosts growth. What explains these results, which are contrary to the predictions of conventional theoretical models? We provide some evidence that even successful developing countries have limited absorptive capacity for foreign resources, either because their financial markets are underdeveloped, or because their economies are prone to overvaluation caused by rapid capital inflows.
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Cites
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How Does Foreign Direct Investment Affect Economic Growth?
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Why Do Some Countries Produce So Much More Output per Worker than Others?
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The Great Reversals: The Politics of Financial Development in the 20th Century
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Self-citationThe global saving glut and the U.S. current account deficitPreprint
Bernanke, B. (2005) · RePEc: Research Papers in Economics · Cited by 659
What Matters for Financial Development? Capital Controls, Institutions, and Interactions
Chinn, M. D., & Ito, H. (2005) · SSRN Electronic Journal · doi:10.2139/ssrn.677506 · Cited by 658
Capital Flows to Developing Countries: The Allocation Puzzle
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The Anatomy of Start-Stop Growth
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The Real Exchange Rate and Economic Growth
Rodrik, D. (2008) · Brookings Papers on Economic Activity · doi:10.1353/eca.0.0020 · Cited by 1,753
Berg, A., Ostry, J. D., & Zettelmeyer, J. (2012) · Journal of Development Economics · doi:10.1016/j.jdeveco.2011.08.002 · Cited by 684
Thresholds in the process of international financial integration
Ayhan Kose, M., Prasad, E. S., & Taylor, A. D. (2011) · Journal of International Money and Finance · doi:10.1016/j.jimonfin.2010.08.005 · Cited by 325
Self-citationFDI, Productivity and Financial Development
Alfaro, L., Kalemli‐Ozcan, S., & Sayek, S. (2009) · The World Economy · doi:10.1111/j.1467-9701.2009.01159.x · Cited by 320
Does openness to international financial flows raise productivity growth?
Ayhan Kose, M., Prasad, E. S., & Terrones, M. E. (2009) · Journal of International Money and Finance · doi:10.1016/j.jimonfin.2009.01.005 · Cited by 294
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Metadata
- Authors
- Prasad, E., Rajan, R., & Subramanian, A.
- Venue
- Brookings Papers on Economic Activity
- Publisher
- Project MUSE
- Published
- 2007
- Volume
- 2007
- Issue
- 1
- Pages
- 153-230
- ISSN
- 0007-2303 (ISSN-L)
- 1533-4465
- OpenAlex
- W3121292762
- Cited by
- 334
- References
- 20
- FWCI
- 40.74
- Type
- journal article
- Language
- en
- Open access
- bronze
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
