Capital flows and growth in developing countries

Are capital inflows associated with faster income growth? There are a large number of empirical studies that identify the most relevant determinants of a country’s growth rate. However, this literature has not explored the growth impact of the various types of capital inflows. The present study analyses the effects of the different components of private capital inflows on the growth of 44 developing countries. A dynamic panel with yearly data is estimated during the 1986-97 period. After controlling for the variables traditionally used in growth regressions, the following main conclusions emerge. First, foreign direct investment and portfolio equity flows exhibit a robust positive correlation with growth. Second, portfolio bond flows are not significantly linked to economic growth. Finally, in economies with undercapitalised banking systems, bank-related inflows are negatively correlated with the growth rate. This result holds for both short- and long-term bank-related ... Les entrees de capitaux vont-elles de pair avec une acceleration de la croissance des revenus ? Nombreuses sont les etudes empiriques qui identifient les principaux determinants du taux de croissance d’un pays. Neanmoins, ces travaux n’ont pas etudie l’incidence sur la croissance des differents types d’entrees de capitaux. Ce Document analyse les effets sur la croissance des diverses composantes des entrees de capitaux prives pour 44 pays en developpement. Une serie dynamique de donnees annuelles est estimee sur la periode 1986-97. Apres neutralisation des variables generalement utilisees dans les regressions de croissance, plusieurs conclusions se degagent : tout d’abord, l’investissement direct etranger et les prises de participation (flux de portefeuille en actions) sont correles de facon positive et robuste avec la croissance. Ensuite, les flux de portefeuille en obligations ne montrent pas de liens significatifs avec la croissance. Enfin, dans les economies dont le systeme ...

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