Institutions and the External Capital Structure of Countries

Author/creator Mauro, Paolo Author
Other author Faria, Andr Author
Format Electronic
Publication InfoWashington : International Monetary Fund
Description32 p.
Supplemental ContentFull text available from Ebook Central - Academic Complete

Summary Annotation A widespread view holds that countries that finance themselves through foreign direct investment (FDI) and portfolio equity, rather than bonds and loans, are less prone to crises. But what determines countries' external capital structures? In a cross section of emerging markets and developing countries, we find that equity-like liabilities (FDI and, especially, portfolio equity) as a share of countries' total external liabilities (or as a share of GDP) are positively and significantly associated with indicators of educational attainment, natural resource abundance, and especially, institutional quality. These relationships are robust to attempts to control for possible endogeneity, suggesting that better institutional quality may help improve countries' capital structures. the results might also provide an explanation for the observed correlation between institutional quality and the frequency of crises.
Access restrictionAvailable only to authorized users.
Technical detailsMode of access: World Wide Web
Genre/formElectronic books.
ISBN9781451920314
ISBN1451920318 (E-Book) Active Record
Stock number00013468

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