Private capital flows to developing countries : the role of the domestic financial sector.
The relationship between private capital flows and growth has been examined extensively in the literature, yet numerous controversies remain. This study examines the relationships among private capital flows (foreign direct investment and portfolio investment), financial development and economic pe...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English English |
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Routledge
2010
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| Online Access: | http://psasir.upm.edu.my/id/eprint/16347/ http://psasir.upm.edu.my/id/eprint/16347/1/Private%20capital%20flows%20to%20developing%20countries.pdf |
| _version_ | 1848842936550162432 |
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| author | Choong, Chee Keong Yusop, Zulkornain Law, Siong Hook |
| author_facet | Choong, Chee Keong Yusop, Zulkornain Law, Siong Hook |
| author_sort | Choong, Chee Keong |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | The relationship between private capital flows and growth has been examined extensively in the literature, yet numerous controversies remain. This study examines the
relationships among private capital flows (foreign direct investment and portfolio investment), financial development and economic performance in a panel of developing countries over the period 1983–2006, by employing generalized method of moments(GMM) panel data analysis. We find that these private capital flows have a positive impact on growth with a well-developed financial sector but have a negative effect in the presence of poor financial sector development. Moreover, foreign direct investment promotes economic growth via efficiency effect, while portfolio investment stimulates economic growth via investment effect. Hence, well-developed financial sectors are
ones that are crucial for economic growth. |
| first_indexed | 2025-11-15T08:07:03Z |
| format | Article |
| id | upm-16347 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English English |
| last_indexed | 2025-11-15T08:07:03Z |
| publishDate | 2010 |
| publisher | Routledge |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-163472015-11-02T02:02:26Z http://psasir.upm.edu.my/id/eprint/16347/ Private capital flows to developing countries : the role of the domestic financial sector. Choong, Chee Keong Yusop, Zulkornain Law, Siong Hook The relationship between private capital flows and growth has been examined extensively in the literature, yet numerous controversies remain. This study examines the relationships among private capital flows (foreign direct investment and portfolio investment), financial development and economic performance in a panel of developing countries over the period 1983–2006, by employing generalized method of moments(GMM) panel data analysis. We find that these private capital flows have a positive impact on growth with a well-developed financial sector but have a negative effect in the presence of poor financial sector development. Moreover, foreign direct investment promotes economic growth via efficiency effect, while portfolio investment stimulates economic growth via investment effect. Hence, well-developed financial sectors are ones that are crucial for economic growth. Routledge 2010-11 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/16347/1/Private%20capital%20flows%20to%20developing%20countries.pdf Choong, Chee Keong and Yusop, Zulkornain and Law, Siong Hook (2010) Private capital flows to developing countries : the role of the domestic financial sector. Journal of the Asia Pacific Economy, 15 (4). pp. 509-529. ISSN 1354-7860 10.1080/13547860.2010.516173 English |
| spellingShingle | Choong, Chee Keong Yusop, Zulkornain Law, Siong Hook Private capital flows to developing countries : the role of the domestic financial sector. |
| title | Private capital flows to developing countries : the role of the domestic financial sector. |
| title_full | Private capital flows to developing countries : the role of the domestic financial sector. |
| title_fullStr | Private capital flows to developing countries : the role of the domestic financial sector. |
| title_full_unstemmed | Private capital flows to developing countries : the role of the domestic financial sector. |
| title_short | Private capital flows to developing countries : the role of the domestic financial sector. |
| title_sort | private capital flows to developing countries : the role of the domestic financial sector. |
| url | http://psasir.upm.edu.my/id/eprint/16347/ http://psasir.upm.edu.my/id/eprint/16347/ http://psasir.upm.edu.my/id/eprint/16347/1/Private%20capital%20flows%20to%20developing%20countries.pdf |