Private Capital Flows to Low Income Countries: Country-Specific Effects and the Lucas Paradox

43 Pages Posted: 24 Mar 2010

See all articles by Corine Franken

Corine Franken

University of Amsterdam

Sweder van Wijnbergen

Universiteit van Amsterdam; Tinbergen Institute; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Date Written: January 15, 2010

Abstract

This paper analyses Net Private Capital Flows to LICs incorporating the recent surge in FDI between 2000 and 2006. We show that including country-specific effects in a paneldata setup resolves the Lucas Paradox, at least for LICs. Our results suggest that openness is among the most important factors explaining country-specific performance in attracting Net Private Capital Flows.

Suggested Citation

Franken, Corine and van Wijnbergen, Sweder, Private Capital Flows to Low Income Countries: Country-Specific Effects and the Lucas Paradox (January 15, 2010). Available at SSRN: https://ssrn.com/abstract=1537004 or http://dx.doi.org/10.2139/ssrn.1537004

Corine Franken

University of Amsterdam

Spui 21
Amsterdam, 1018 WB
Netherlands

Sweder Van Wijnbergen (Contact Author)

Universiteit van Amsterdam ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands
+31 20 525 4011 / 4203 (Phone)
+31-35-624 91 82 (Fax)

Tinbergen Institute

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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