FDI, debt and capital controls

摘要

We examine the link between financial sector FDI flows, banking debt flows and capital controls in emerging market economies during episodes of large gross capital inflows - surges. We find that FDI surges in the financial sector behave remarkably similar to surges in banking debt flows: they are associated with boom-bust cycles in GDP and expansions of credit in foreign currency, unlike surges in FDI in the non-financial sectors. Moreover, global and contagion factors have a strong explanatory