What Types Of Capital Flows Help Improve International Risk Sharing

Download or read book What Types of Capital Flows Help Improve International Risk Sharing? written by Ergys Islamaj and published by . This book was released on with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt: Cross-border capital flows are expected to lead to increased international risk sharing by facilitating borrowing and lending in global financial markets. This paper examines risk-sharing outcomes of various types of capital flows (foreign direct investment, portfolio equity, debt, remittance, and aid flows) in a large sample of emerging market and developing economies. The results suggest that remittances and aid flows are associated with increased international risk sharing. Other types of capital flows are not consistently correlated with better risk-sharing outcomes. These findings are robust to the use of different econometric specifications, country-specific characteristics, and other controls.