Private capital flows to low income countries: country-specific effects and the Lucas Paradox

Open Access
Authors
Publication date 2010
Series Tinbergen Institute Discussion Papers, TI 2010-003/2
Number of pages 43
Publisher Amsterdam: Faculteit Economie en Bedrijfskunde
Organisations
  • Faculty of Economics and Business (FEB) - Amsterdam School of Economics Research Institute (ASE-RI)
Abstract This paper analyses Net Private Capital Flows to LICs incorporating the recent surge in
FDI between 2000 and 2006. We show that including country-specific effects in a paneldata
setup resolves the Lucas Paradox, at least for LICs. Our results suggest that openness is
among the most important factors explaining country-specific performance in attracting Net
Private Capital Flows.

JEL codes: F21, G15
Document type Report
Published at http://www.tinbergen.nl/discussionpapers/10003.pdf
Downloads
315225.pdf (Accepted author manuscript)
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