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The Composition of Capital Flows Is South Africa Different?

Over the past decade, South Africa has attracted relatively little foreign direct investment (FDI), but considerable amounts of portfolio inflows. In this context, the objective of the paper is twofold: to identify the determinants of the level and composition of capital flows to emerging markets an...

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Bibliographic Details
Main Author: Funke, Norbert
Other Authors: Ahmed, Faisal, Arezki, Rabah
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2005
Series:IMF Working Papers
Subjects:
Investments, Foreign
Long-term Capital Movements
Finance: General
Currency
Emerging And Frontier Financial Markets
Capital Movements
Foreign Exchange
Finance
International Economics
Exports And Imports
Financial Services Industry
Capital Flows
Exchange Rates
Capital Inflows
General Financial Markets: General (includes Measurement And Data)
Foreign Direct Investment
International Investment
South Africa
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Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:Over the past decade, South Africa has attracted relatively little foreign direct investment (FDI), but considerable amounts of portfolio inflows. In this context, the objective of the paper is twofold: to identify the determinants of the level and composition of capital flows to emerging markets and to draw policy conclusions for South Africa. We estimate a dynamic panel for up to 81 emerging markets using GMM (Generalized Method of Moments) techniques. The results suggest that further trade and capital control liberalization would increase the share of FDI. Additionally, a reduction in exchange rate volatility would affect the composition of capital flows in favor of FDI.
Physical Description:28 pages
ISBN:9781451860597

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