Sudden Stops : Are Global and Local Investors Alike?

Calderón, César; Kubota, Megumi

dc.creator	Calderón, César
dc.creator	Kubota, Megumi
dc.date	2012-03-19T18:00:33Z
dc.date	2012-03-19T18:00:33Z
dc.date	2011-02-01
dc.date.accessioned	2023-02-17T20:54:42Z
dc.date.available	2023-02-17T20:54:42Z
dc.identifier	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110214154448
dc.identifier	http://hdl.handle.net/10986/3336
dc.identifier.uri	http://localhost:8080/xmlui/handle/CUHPOERS/244272
dc.description	The main goal of this paper is to characterize the determinants of sudden stops caused by domestic vis-a-vis foreign residents. Are the decisions of domestic investors to invest abroad or of foreign investors to cut off funds from the domestic economy governed by the same set of determinants? Given the distribution of different types of sudden stop episodes over time and its different macroeconomic consequences, the authors argue that the determinants may not be alike. Using an effective sample of 82 countries with annual information over the period 1970-2007, the analysis finds that global investors are less likely to stop bringing their capital when their economy is growing and the world interest rate is lower. Domestic agents are more willing to invest abroad if the macroeconomic performance of the domestic economy is poor (high inflation), the financial system is weak, and there are high external savings (current account surpluses). Increasing financial openness makes the domestic country more vulnerable to sudden stops caused by either local or global investors. Finally, countries with higher shares of foreign direct investment are less prone to inflow-driven sudden stops, whereas the opposite holds for outflow-driven sudden stops.
dc.language	English
dc.relation	Policy Research working paper ; no. WPS 5569
dc.rights	CC BY 3.0 IGO
dc.rights	http://creativecommons.org/licenses/by/3.0/igo/
dc.rights	World Bank
dc.subject	ADVANCED COUNTRIES
dc.subject	BALANCE OF PAYMENTS
dc.subject	BANK ASSETS
dc.subject	BANK CREDIT
dc.subject	BANK DEPOSIT
dc.subject	BANK DEPOSITS
dc.subject	BANK POLICY
dc.subject	BANKING CRISES
dc.subject	BANKING CRISIS
dc.subject	BANKING SYSTEM
dc.subject	BOND MARKET
dc.subject	BOND MARKET CAPITALIZATION
dc.subject	BOND MARKETS
dc.subject	BONDS
dc.subject	BUDGET SURPLUS
dc.subject	BUSINESS CYCLES
dc.subject	CAPITAL ACCOUNT
dc.subject	CAPITAL ACCOUNT LIBERALIZATION
dc.subject	CAPITAL CONTROLS
dc.subject	CAPITAL FLIGHT
dc.subject	CAPITAL FLOW
dc.subject	CAPITAL FLOWS
dc.subject	CAPITAL GROWTH
dc.subject	CAPITAL INFLOWS
dc.subject	CAPITAL MARKET
dc.subject	CAPITAL MARKET REFORM
dc.subject	CAPITAL MARKETS
dc.subject	CAPITAL OUTFLOWS
dc.subject	CAPITAL STOCK
dc.subject	CENTRAL BANK
dc.subject	COMMUNICATION TECHNOLOGY
dc.subject	CONSUMER PRICE INDEX
dc.subject	CORPORATE GOVERNANCE
dc.subject	CREDIT CONSTRAINTS
dc.subject	CREDIT GROWTH
dc.subject	CURRENCY
dc.subject	CURRENCY CRISES
dc.subject	CURRENCY CRISIS
dc.subject	CURRENCY MISMATCHES
dc.subject	CURRENT ACCOUNT
dc.subject	CURRENT ACCOUNT BALANCE
dc.subject	CURRENT ACCOUNT DEFICITS
dc.subject	CURRENT ACCOUNT SURPLUSES
dc.subject	DATA AVAILABILITY
dc.subject	DEBT
dc.subject	DEBT BURDEN
dc.subject	DEBT FINANCING
dc.subject	DEBT FLOWS
dc.subject	DEPOSIT
dc.subject	DERIVATIVES
dc.subject	DEVELOPING COUNTRIES
dc.subject	DOMESTIC CREDIT
dc.subject	DOMESTIC CURRENCY
dc.subject	DOMESTIC ECONOMY
dc.subject	DOMESTIC FINANCIAL MARKETS
dc.subject	DOMESTIC INVESTORS
dc.subject	ECONOMIC PERFORMANCE
dc.subject	EMERGING MARKET
dc.subject	EMERGING MARKET ECONOMIES
dc.subject	EMERGING MARKETS
dc.subject	EQUITY FLOWS
dc.subject	EQUITY MARKETS
dc.subject	EXCHANGE RATE REGIME
dc.subject	EXCHANGE RATE REGIMES
dc.subject	EXPORT BASE
dc.subject	EXPOSURE
dc.subject	EXTERNAL ASSETS
dc.subject	EXTERNAL FINANCE
dc.subject	EXTERNAL FINANCING
dc.subject	FEDERAL RESERVE
dc.subject	FEDERAL RESERVE BANK
dc.subject	FINANCIAL DERIVATIVES
dc.subject	FINANCIAL DEVELOPMENT
dc.subject	FINANCIAL FLOWS
dc.subject	FINANCIAL INFLOWS
dc.subject	FINANCIAL INFRASTRUCTURE
dc.subject	FINANCIAL INSTITUTION
dc.subject	FINANCIAL INSTITUTIONS
dc.subject	FINANCIAL INSTRUMENTS
dc.subject	FINANCIAL OPENNESS
dc.subject	FINANCIAL SECTOR
dc.subject	FINANCIAL SECTOR INDICATORS
dc.subject	FINANCIAL SECTORS
dc.subject	FINANCIAL SERVICES
dc.subject	FINANCIAL SHOCKS
dc.subject	FINANCIAL SYSTEM
dc.subject	FISCAL DEFICITS
dc.subject	FISCAL POLICIES
dc.subject	FISCAL POLICY
dc.subject	FLEXIBLE EXCHANGE RATE
dc.subject	FLOWS OF CAPITAL
dc.subject	FOREIGN ASSETS
dc.subject	FOREIGN BANK
dc.subject	FOREIGN CAPITAL
dc.subject	FOREIGN DIRECT INVESTMENT
dc.subject	FOREIGN EQUITIES
dc.subject	FOREIGN FINANCING
dc.subject	FOREIGN INTEREST
dc.subject	FOREIGN INVESTORS
dc.subject	FOREIGN PORTFOLIO
dc.subject	FOREIGN PORTFOLIO INVESTMENT
dc.subject	GLOBAL CAPITAL
dc.subject	GLOBAL CAPITAL FLOWS
dc.subject	GLOBAL ECONOMY
dc.subject	GLOBAL INVESTORS
dc.subject	GLOBALIZATION
dc.subject	GOVERNMENT BUDGET
dc.subject	GOVERNMENT EXPENDITURE
dc.subject	GROWTH RATE
dc.subject	GROWTH RATES
dc.subject	HIGH INFLATION
dc.subject	INCOME
dc.subject	INCOME LEVELS
dc.subject	INDEBTED COUNTRIES
dc.subject	INDUSTRIAL COUNTRIES
dc.subject	INFLATION
dc.subject	INFLATION RATE
dc.subject	INFORMATION ASYMMETRIES
dc.subject	INFRASTRUCTURE PROJECTS
dc.subject	INSURANCE
dc.subject	INTEREST RATE
dc.subject	INTEREST RATES
dc.subject	INTERNATIONAL BANK
dc.subject	INTERNATIONAL BORROWING
dc.subject	INTERNATIONAL CAPITAL
dc.subject	INTERNATIONAL CAPITAL MARKETS
dc.subject	INTERNATIONAL CREDIT
dc.subject	INTERNATIONAL ECONOMICS
dc.subject	INTERNATIONAL ECONOMIES
dc.subject	INTERNATIONAL FINANCIAL INTEGRATION
dc.subject	INTERNATIONAL FINANCIAL MARKETS
dc.subject	INTERNATIONAL FINANCIAL STATISTICS
dc.subject	INTERNATIONAL INVESTMENTS
dc.subject	INTERNATIONAL MARKETS
dc.subject	INTERNATIONAL RESERVES
dc.subject	INVESTMENT CLIMATE
dc.subject	INVESTMENT FLOWS
dc.subject	LIABILITY
dc.subject	LIQUID ASSETS
dc.subject	LIQUIDITY
dc.subject	LOCAL CAPITAL MARKETS
dc.subject	LOCAL FINANCIAL MARKETS
dc.subject	LOCAL INVESTORS
dc.subject	MACROECONOMIC MISMANAGEMENT
dc.subject	MACROECONOMIC PERFORMANCE
dc.subject	MACROECONOMIC POLICIES
dc.subject	MACROECONOMIC POLICY
dc.subject	MACROECONOMIC STABILITY
dc.subject	MACROECONOMIC VULNERABILITY
dc.subject	MICRO DATA
dc.subject	MIDDLE-INCOME COUNTRIES
dc.subject	MONETARY FUND
dc.subject	MONETARY POLICY
dc.subject	MONETARY STABILITY
dc.subject	MONEY MARKET
dc.subject	MONEY MARKET RATE
dc.subject	NATURAL RESOURCE
dc.subject	NATURAL RESOURCES
dc.subject	NET CAPITAL
dc.subject	NET DEBT
dc.subject	NON-PERFORMING LOANS
dc.subject	OUTPUT
dc.subject	POLICY RESPONSES
dc.subject	PORTFOLIO
dc.subject	PORTFOLIO INFLOWS
dc.subject	PORTFOLIO INVESTMENT
dc.subject	PORTFOLIOS
dc.subject	POSITIVE COEFFICIENT
dc.subject	PRICE STABILITY
dc.subject	PRIVATE BOND
dc.subject	PRIVATE CAPITAL
dc.subject	PRIVATE CAPITAL INFLOWS
dc.subject	PRIVATE CREDIT
dc.subject	PRIVATE SECTOR FINANCE
dc.subject	PUSH FACTORS
dc.subject	RATE OF GROWTH
dc.subject	REAL ECONOMIC ACTIVITY
dc.subject	REAL EXCHANGE RATE
dc.subject	REAL EXCHANGE RATES
dc.subject	REAL INTEREST
dc.subject	REAL INTEREST RATE
dc.subject	REGULATORY CAPITAL
dc.subject	REGULATORY FRAMEWORKS
dc.subject	RESERVE
dc.subject	RESERVE ACCUMULATION
dc.subject	RESERVES
dc.subject	RETURN
dc.subject	RETURNS
dc.subject	RISK AVERSION
dc.subject	SAVINGS
dc.subject	SECURITIES
dc.subject	SMALL COUNTRIES
dc.subject	STOCK MARKET
dc.subject	STOCK MARKET CAPITALIZATION
dc.subject	STOCKS
dc.subject	T-BILLS
dc.subject	TAX
dc.subject	TAX SYSTEMS
dc.subject	TRADE BALANCE
dc.subject	TRADING
dc.subject	TREASURY
dc.subject	TREASURY BILLS
dc.subject	VOLATILITY
dc.subject	WORLD DEVELOPMENT INDICATORS
dc.subject	WORLD INTEREST RATE
dc.subject	WORLD MARKET
dc.title	Sudden Stops : Are Global and Local Investors Alike?
dc.type	Publications & Research :: Policy Research Working Paper
dc.coverage	The World Region
dc.coverage	The World Region