What Types of Capital Flows HelpImprove International Risk Sharing/Islamaj,Ergys Kose,Ayhan .World Bank

Crossborder capital flows are expected            to lead to increased international risk sharing by            facilitating borrowing and lending in global financial            markets. This paper examines risk-sharing outcomes of            various types of capital flows (foreign direct investment,            portfolio equity, debt, remittance, and aid flows) in a            large sample of emerging market and developing economies.            The results suggest that remittances and aid flows are            associated with increased international risk sharing. Other            types of capital flows are not consistently correlated with            better risk-sharing outcomes. These findings are robust to            the use of different econometric specifications,            country-specific characteristics, and other controls.

What-Types-of-Capital-Flows-Help-Improve-International-Risk-Sharing-복사.pdf

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