Financial Globalization in Emerging Countries: Diversification vs. Offshoring

38 Pages Posted: 20 Apr 2016

See all articles by Francisco Ceballos

Francisco Ceballos

International Food Policy Research Institute (IFPRI)

Tatiana Didier

World Bank

Sergio L. Schmukler

World Bank - Development Research Group (DECRG)

Multiple version iconThere are 2 versions of this paper

Date Written: June 1, 2012

Abstract

Financial globalization has gathered attention since the early 1990s because of its macro-financial implications and growing importance. But financial globalization has taken shape via different forms over time. This paper examines two important, concurrent dimensions of financial globalization: diversification and offshoring. The diversification dimension refers to the increase in foreign assets and liabilities in countries' portfolios. Offshoring is related to the reallocation of financial activities to international markets. The former focuses on who holds the assets, the latter on where transactions take place. The authors find that globalization via the diversification channel expanded throughout the world during the 2000s, as domestic residents invested more abroad and foreigners increased their investments at home, generating more cross-border holdings. However, financial globalization via offshoring displays more mixed patterns, with variations across markets and countries. The paper also shows that the nature of financing through both diversification and offshoring has improved for emerging countries.

Keywords: Debt Markets, Emerging Markets, Mutual Funds, Economic Theory & Research, Banks & Banking Reform

Suggested Citation

Ceballos, Francisco and Didier, Tatiana and Schmukler, Sergio, Financial Globalization in Emerging Countries: Diversification vs. Offshoring (June 1, 2012). World Bank Policy Research Working Paper No. 6105. Available at SSRN: https://ssrn.com/abstract=2092478

Francisco Ceballos (Contact Author)

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

Tatiana Didier

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States
(202)458-1525 (Phone)

Sergio Schmukler

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN MC 3-301
Washington, DC 20433
United States
202-458-4167 (Phone)
202-522-3518 (Fax)

HOME PAGE: http://www.worldbank.org/en/about/people/s/sergio-schmukler

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