Non-FDI Capital Inflows in Low-Income Developing Countries: Catching the Wave?

By Juliana Dutra Araujo, Antonio David, Carlos van Hombeeck, Chris Papageorgiou

April 29, 2015

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Juliana Dutra Araujo, Antonio David, Carlos van Hombeeck, and Chris Papageorgiou. Non-FDI Capital Inflows in Low-Income Developing Countries: Catching the Wave?, (USA: International Monetary Fund, 2015) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Low-income countries (LIDCs) are typically characterized by intermittent and very modest access to private external funding sources. Motivated by recent developments in private flows to LIDCs this paper makes two contributions: First, it constructs a new comprehensive dataset on gross private capital flows with special focus on non-FDI flows in LIDCs. Concentrating on LIDCs and more specifically on gross non-FDI private flows is intentionally aimed at closing a gap in existing datasets where country coverage of developing economies is limited mainly to emerging markets (EMs). Second, using the new data, it identifies several shifting patterns of gross non-FDI private inflows to LIDCs. A surprising fact emerges: since the mid 2000's periods of surges in gross non-FDI private inflows in LIDCs are broadly comparable to those of EMs. Moreover, while gross non-FDI inflows to LIDCs are on average much lower than those to EMs, we show that the LIDC top quartile gross non-FDI inflow is comparable to the EM median inflow and converging to the EM top quartile inflow.

Subject: Balance of payments, Balance of payments statistics, Capital flows, Capital inflows, Economic and financial statistics, Financial crises, Foreign direct investment, Global financial crisis of 2008-2009

Keywords: Balance of payments statistics, Benchmark LIDC sample, Capital flows, Capital inflows, FDI flow, FDI inflow, Foreign direct investment, Global, Global financial crisis of 2008-2009, Gross Capital Flows, Inflows to LIDCs, Inflows trend, LIDC database, LIDCs + EMs, Low-Income Countries, Low-income developing countries, Market Access, Private inflow, Surges, WEO data, WP

Publication Details

Pages:

41
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2015/086
Stock No:

WPIEA2015086
ISBN:

9781484341087
ISSN:

1018-5941

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