Calderón, CésarKubota, Megumi2014-02-032014-02-032014-01https://hdl.handle.net/10986/16824Over the past 15 years, gross inflows to industrial and developing countries have enjoyed a wild ride. After reaching record highs in the run-up to the global financial crisis, they collapsed dramatically in 2008-09. As signs of global recovery reappeared, capital inflows resumed although at different speeds. The recovery in flows was faster and sharper in developing countries. This paper aims at understanding the (domestic and external) drivers of these surges in gross inflows using quarterly data for 67 countries from 1975 to 2010. It finds that domestic and external factors have significant explanatory power in driving surges of inflows. This finding holds for the sample of industrial countries whereas domestic factors play a significantly larger role in explaining surges to developing countries. Zooming into the findings shows that: (a) financial booms tend to attract massive capital inflows, (b) surges to either industrial or developing countries are driven by regional contagion, and (c) strong growth and natural resource abundance are keys to attract inflows of foreign capital into developing countries.en-USCC BY 3.0 IGOACCOUNTINGADVANCED COUNTRIESADVANCED ECONOMIESASSET POSITIONASSET PRICEASSET PRICESASYMMETRIC INFORMATIONBALANCE OF PAYMENTSBALANCE SHEETSBANK POLICYBANKING CRISESBANKING CRISISBONDBOND FUNDSBONDSBOOM-BUST CYCLESBROKERSCAPITAL ACCOUNTCAPITAL FLOWCAPITAL FLOWSCAPITAL INFLOWCAPITAL INFLOWSCAPITAL MOBILITYCAPITAL MOVEMENTSCENTRAL BANKCENTRAL BANKSCOMMODITYCOMMODITY PRICESCONSUMER PRICE INDEXCOUNTRY RISKCREDIT EXPANSIONCREDIT EXPANSIONSCREDIT GROWTHCREDIT MARKETSCREDITWORTHINESSCURRENCYCURRENCY CRISISCURRENT ACCOUNT BALANCECURRENT ACCOUNT BALANCESCURRENT ACCOUNT DEFICITCURRENT ACCOUNT DEFICITSCURRENT ACCOUNT SURPLUSESDEBTDEBT CRISISDEBT FLOWSDEBT RELIEFDEBT SECURITIESDEVALUATIONDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPING ECONOMIESDEVELOPMENT BANKDOMESTIC CREDITDOMESTIC CURRENCIESDOMESTIC CURRENCYDOMESTIC ECONOMYDOMESTIC FINANCIAL MARKETSDOMESTIC INVESTORSDOMESTIC MARKETSDUMMY VARIABLEEMERGING ECONOMIESEMERGING ECONOMYEMERGING MARKETEMERGING MARKET ECONOMIESEMERGING MARKETSEQUITY FLOWSEQUITY FUNDSEQUITY SECURITIESEXCESS LIQUIDITYEXCHANGE RATEEXCHANGE RATE REGIMEEXCHANGE RATESEXPORTERSEXTERNAL FINANCEEXTERNAL FINANCINGFEDERAL RESERVEFEDERAL RESERVE BANKFINANCIAL ASSETFINANCIAL CONTAGIONFINANCIAL CRISESFINANCIAL CRISISFINANCIAL DEVELOPMENTSFINANCIAL FACTORSFINANCIAL FLOWSFINANCIAL INFLOWSFINANCIAL INSTABILITYFINANCIAL INSTITUTIONFINANCIAL INSTITUTIONSFINANCIAL MARKETSFINANCIAL OPENNESSFINANCIAL REFORMFINANCIAL SECTORFINANCIAL STABILITYFINANCIAL SUPPORTFINANCIAL SYSTEMFINANCIAL SYSTEMSFINANCIAL TRANSACTIONSFISCAL POLICIESFLEXIBLE EXCHANGE RATEFLEXIBLE EXCHANGE RATE REGIMESFLOATING RATESFLOW OF CAPITALFLOW OF FUNDSFOREIGN ASSETFOREIGN ASSET POSITIONFOREIGN ASSETSFOREIGN CAPITALFOREIGN DEBTFOREIGN DIRECT INVESTMENTFOREIGN FINANCINGFOREIGN INTERESTFOREIGN INVESTMENTFOREIGN INVESTORSGLOBAL CAPITALGLOBAL CAPITAL FLOWSGLOBAL ECONOMYGLOBAL MARKETSGLOBAL RISKGLOBAL STOCK MARKETSGLOBALIZATIONGOVERNMENT POLICIESGROWTH RATEHUMAN RESOURCEIMPLIED VOLATILITYINCOMEINCOME DIFFERENTIALSINDUSTRIAL COUNTRIESINFLATIONINFLATION CRISISINFLATION RATEINFLOWS OF CAPITALINTEREST RATEINTERNATIONAL BANKINTERNATIONAL CAPITALINTERNATIONAL CAPITAL FLOWSINTERNATIONAL CAPITAL MARKETINTERNATIONAL ECONOMICSINTERNATIONAL FINANCIAL INTEGRATIONINTERNATIONAL FINANCIAL STATISTICSINTERNATIONAL INTERESTINTERNATIONAL TRADEINVESTMENT FLOWSINVESTMENT OPPORTUNITIESLIABILITYLIQUIDITYLIQUIDITY PROBLEMSLOANLOCAL CURRENCIESLOCAL CURRENCYLOCAL INVESTORSMACROECONOMIC INSTABILITYMACROECONOMIC POLICYMARKET RETURNMATURITYMATURITY MISMATCHESMICRO DATAMIDDLE-INCOME COUNTRIESMONETARY AUTHORITYMONETARY POLICYMONETARY STABILITYMONEY MARKETMONEY MARKET RATEMUTUAL FUNDSNATURAL RESOURCENATURAL RESOURCESNEGATIVE SHOCKNET CAPITALNET DEBTOPEN ECONOMIESOUTPUTPOLICY RESPONSESPORTFOLIOPORTFOLIO INFLOWSPORTFOLIO INVESTMENTPORTFOLIO RISKPORTFOLIOSPOSITIVE COEFFICIENTPRIVATE CAPITALPRIVATE CAPITAL INFLOWSPROPERTY RIGHTSPUSH FACTORPUSH FACTORSRAPID EXPANSIONREAL ECONOMIC ACTIVITYREAL EXCHANGE RATEREAL EXCHANGE RATESREAL INTERESTREAL INTEREST RATEREAL INTEREST RATESREGULATORY FRAMEWORKRESERVERETURNRETURNSRISK AVERSIONSHARE OF EQUITYSHORT-TERM LIABILITIESSOVEREIGN DEFAULTSOVEREIGN RISKSTOCK MARKETSTOCK MARKET VOLATILITYSTOCK MARKETSSTOCK RETURNSTOCK RETURNSSYSTEMIC RISKSTAXTAX CODETRADE BALANCETRADINGWORLD DEVELOPMENT INDICATORSWORLD ECONOMYWORLD FINANCIAL MARKETSWORLD STOCK MARKETSWorld Bank10.1596/1813-9450-6753