The composition of capital flows to South Africa
Title: The composition of capital flows to South Africa
Citation: Journal of international development, 2007, 19, 2, 275-294
Unlike in most other emerging markets, capital flows to South Africa since the mid 1990s have been heavily biased toward portfolio flows. In this context, the objective of the paper is twofold: to identify the determinants of the level and composition of capital flows to emerging markets and to draw policy conclusions for South Africa. The empirical results suggest that further trade and capital control liberalisation would increase the share of FDI in South Africa. Additionally, a reduction in exchange rate volatility would affect the composition of capital flows in favour of FDI. Copyright John Wiley & Sons. Reproduced with permission. An electronic version of this article is available online at http://www.interscience.wiley.com
Subject: Capital flow; Foreign direct investment; Economic policy; Exchange rates; Capital market; Economic development; Distribution; South Africa
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