What drives international financial flows? Politics, institutions and other determinants

• 成果类型: Article
• 署名作者: Papalioannou, Elias
• 署名单位: Dartmouth College
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2008.04.001
• 发表日期: 2009
• 页码: 269-281
• 关键词: capital flows; institutions; law and finance; POLITICS; banks; International finance

摘要

This paper uses a large panel of financial flow data from banks to assess how institutions affect international lending. First, employing a time varying composite institutional quality index in a fixed-effects framework, the paper shows that institutional improvements are followed by significant increases in international finance. Second, cross-sectional models also show a strong effect of initial levels of institutional quality on future bank lending. Third, instrumental variable estimates further show that the historically predetermined component of institutional development is also a significant correlate of international bank inflows. The results thus suggest that institutional underdeveloped can explain a significant part of Lucas [Lucas, Robert E. 1990. Why Doesn't Capital Flow from Rich to Poor Countries? American Economic Review (Papers and Proceedings), 80 (2): 92-96. 1990] paradox of why doesn't capital flow front rich to poor countries. The analysis also does a first-step towards understanding which institutional features affect international banking. (c) 2008 Elsevier B.V. All rights reserved.