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

40 Pages Posted: 24 Apr 2018

See all articles by Juliana Araujo

Juliana Araujo

International Monetary Fund (IMF)

Antonio C. David

World Bank - Policy Research Department; International Monetary Fund (IMF)

Carlos van Hombeeck

Bank of England

Chris Papageorgiou

International Monetary Fund (IMF) - Research Department

Date Written: March 2017

Abstract

Low-income countries (LICs) are typically characterized by intermittent and very modest access to private external funding sources. Motivated by recent developments in private flows to these economies, this paper makes two contributions: first, it constructs a new comprehensive dataset on gross private capital flows with special focus on non-FDI flows to LICs. Concentrating on LICs 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 LICs. A surprising fact emerges: since the mid-2000s periods of surges in gross non-FDI private inflows to LICs are broadly comparable to those of EMs. Moreover, while gross non-FDI inflows to LICs are on average much lower than those to EMs, we show that gross non-FDI inflows to the top quartile of LICs are comparable to those of the median EM and converging to the top quartile of EMs.

Keywords: F21, F30, F32, F34

Suggested Citation

Araujo, Juliana and David, Antonio C. and van Hombeeck, Carlos Eduardo and Papageorgiou, Chris, Non-Fdi Capital Inflows in Low-Income Countries: Catching the Wave? (March 2017). IMF Economic Review, Vol. 65, Issue 2, 2017. Available at SSRN: https://ssrn.com/abstract=3162097 or http://dx.doi.org/10.1057/s41308-016-0025-x

Juliana Araujo (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Antonio C. David

World Bank - Policy Research Department ( email )

1818 H Street
Washington, DC 20433
United States

International Monetary Fund (IMF) ( email )

700 19th Street N.W.
Washington, DC 20431
United States

Carlos Eduardo Van Hombeeck

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Chris Papageorgiou

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

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