Publication:
Corruption, Composition of Capital Flows, and Currency Crises

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dc.contributor.authorWei, Shang-Jin
dc.date.accessioned2014-08-28T17:24:50Z
dc.date.available2014-08-28T17:24:50Z
dc.date.issued2000-08
dc.description.abstractCrony capitalism and international creditors' self-fulfilling expectations are often suggested as rival explanations for currency crises. A possible link between the two has not been explored. The author shows one channel through which crony capitalism can increase the chance of a currency/financial crisis by altering the composition of capital inflows. Using data on bilateral foreign direct investment and bilateral bank loans, the author finds clear evidence that in corrupt countries the composition of capital inflows is relatively light in foreign direct investment. Earlier studies indicated that a country with a capital inflow structure is more likely to run into a currency crisis down the road (partly through international creditors' self-fulfilling expectations). Therefore, crony capitalism, through its effect on the composition of a country's capital inflows, makes the country more vulnerable to currency crises brought about by self-fulfilling expectations. Corruption may also weaken domestic financial supervision, with a subsequent deterioration in the quality in banks' and firms' balance sheets.en
dc.identifierhttp://documents.worldbank.org/curated/en/2000/08/693237/corruption-composition-capital-flows-currency-crises
dc.identifier.doi10.1596/1813-9450-2429
dc.identifier.urihttps://hdl.handle.net/10986/19816
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 2429
dc.rightsCC BY 3.0 IGO
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectBALANCE SHEETS
dc.subjectBANK CREDIT
dc.subjectBANK FOR INTERNATIONAL SETTLEMENTS
dc.subjectBANK LENDING
dc.subjectBANK LOANS
dc.subjectBORROWING
dc.subjectBRIBERY
dc.subjectBUSINESS LICENSES
dc.subjectCAPITAL FLOWS
dc.subjectCAPITAL INFLOWS
dc.subjectCAPITALS
dc.subjectCITIZENS
dc.subjectCOMPETITIVENESS
dc.subjectCORRUPT COUNTRIES
dc.subjectCORRUPT OFFICIALS
dc.subjectCORRUPTION
dc.subjectCORRUPTION LEVELS
dc.subjectCORRUPTION VARIABLE
dc.subjectCOUNTRY AVERAGE
dc.subjectCOUNTRY CHARACTERISTICS
dc.subjectCOUNTRY COVERAGE
dc.subjectCREDIT MARKET
dc.subjectCREDITORS
dc.subjectCRISES
dc.subjectCRONY
dc.subjectCRONY CAPITALISM
dc.subjectDEBT
dc.subjectDEMOCRACY
dc.subjectDEREGULATION
dc.subjectDEVELOPMENT ECONOMICS
dc.subjectDIRECT INVESTMENT STATISTICS
dc.subjectDOMESTIC INVESTORS
dc.subjectECONOMIC DEVELOPMENT
dc.subjectECONOMIC POLICY
dc.subjectECONOMIC RESEARCH
dc.subjectECONOMIC RISK
dc.subjectEMERGING MARKETS
dc.subjectETHNIC GROUPS
dc.subjectEXCHANGE RATE
dc.subjectEXCHANGE RATES
dc.subjectEXPENDITURES
dc.subjectEXPORTS
dc.subjectFDI
dc.subjectFINANCIAL CRISIS
dc.subjectFIRM-LEVEL SURVEYS
dc.subjectFOREIGN BANKS
dc.subjectFOREIGN CAPITAL
dc.subjectFOREIGN DIRECT INVESTMENT
dc.subjectGCR
dc.subjectGDP
dc.subjectGDP PER CAPITA
dc.subjectGROSS DOMESTIC PRODUCT
dc.subjectGROSS PROFIT
dc.subjectHOST COUNTRIES
dc.subjectHOST COUNTRY
dc.subjectHOST ECONOMIES
dc.subjectHOST- COUNTRY
dc.subjectHOST-COUNTRY
dc.subjectINDUSTRIAL COUNTRIES
dc.subjectINSURANCE
dc.subjectINTERNATIONAL BANKING
dc.subjectINTERNATIONAL BANKING STATISTICS
dc.subjectINTERNATIONAL BANKS
dc.subjectINTERNATIONAL DEVELOPMENT
dc.subjectINTERNATIONAL ECONOMICS
dc.subjectINTERNATIONAL FINANCIAL
dc.subjectINTERNATIONAL INVESTORS
dc.subjectINWARD FOREIGN DIRECT INVESTMENT
dc.subjectMEASUREMENT ERROR
dc.subjectMEASUREMENT ERRORS
dc.subjectMORAL HAZARD
dc.subjectOFFSHORE BANKING
dc.subjectPORTFOLIO
dc.subjectPORTFOLIO INVESTMENT
dc.subjectPRIVATE SECTOR
dc.subjectPUBLIC GOVERNANCE
dc.subjectREVERSE CAUSALITY
dc.subjectSTATISTICAL ANALYSES
dc.subjectTAX REVENUES
dc.subjectTRANSITION ECONOMIES
dc.subjectTRANSPARENCY
dc.titleCorruption, Composition of Capital Flows, and Currency Crisesen
dspace.entity.typePublication
okr.crossref.titleCorruption, Composition of Capital Flows, and Currency Crises
okr.date.disclosure2000-08-31
okr.date.doiregistration2025-04-10T09:35:27.588614Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2000/08/693237/corruption-composition-capital-flows-currency-crises
okr.globalpracticeGovernance
okr.globalpracticeTrade and Competitiveness
okr.guid800661468766233910
okr.identifier.doi10.1596/1813-9450-2429
okr.identifier.externaldocumentum000094946_00091205364561
okr.identifier.internaldocumentum693237
okr.identifier.reportWPS2429
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2000/10/13/000094946_00091205364561/Rendered/PDF/multi_page.pdfen
okr.sectorPublic Administration, Law, and Justice :: Public administration- Finance
okr.sectorFinance :: Capital markets
okr.themePublic sector governance :: Other accountability/anti-corruption
okr.themeFinancial and private sector development :: Other financial and private sector development
okr.topicInternational Economics and Trade::Foreign Direct Investment
okr.topicEconomic Theory and Research
okr.topicBanks and Banking Reform
okr.topicInternational Terrorism and Counterterrorism
okr.topicPublic Sector Development::Decentralization
okr.topicPayment Systems and Infrastructure
okr.topicGovernance::Governance Indicators
okr.unitPublic Economics, Development Research Group
okr.volume1
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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