Non-Financial Corporations from Emerging Market Economies and Capital Flows

11 Pages Posted: 11 Dec 2014

See all articles by Stefan Avdjiev

Stefan Avdjiev

Bank for International Settlements (BIS)

Michael K.F. Chui

Bank for International Settlements (BIS)

Hyun Song Shin

Bank for International Settlements (BIS)

Date Written: December 2014

Abstract

Non-financial corporations from emerging market economies (EMEs) have increased their external borrowing significantly through the offshore issuance of debt securities. Having obtained funds abroad, the foreign affiliate of a non-financial corporation could transfer funds to its home country via three channels: it could lend directly to its headquarters (within-company flows), extend credit to unrelated companies (between-company flows) or make a cross-border deposit in a bank (corporate deposit flows). Cross-border capital flows to EMEs associated with all three of the above channels have grown considerably over the past few years, as balance of payments data reveal. To the extent that these flows are driven by financial operations rather than real activities, they could give rise to financial stability concerns.

JEL Classification: D21, F31, G32

Suggested Citation

Avdjiev, Stefan and Chui, Michael K.F. and Shin, Hyun Song, Non-Financial Corporations from Emerging Market Economies and Capital Flows (December 2014). BIS Quarterly Review December 2014. Available at SSRN: https://ssrn.com/abstract=2535973

Stefan Avdjiev (Contact Author)

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Michael K.F. Chui

Bank for International Settlements (BIS) ( email )

CH-4002 Basel, Basel-Stadt
Switzerland

Hyun Song Shin

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

HOME PAGE: http://www.bis.org/author/hyun_song_shin.htm

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