Please use this identifier to cite or link to this item:
http://bura.brunel.ac.uk/handle/2438/27992
Title: | The effect of capital inflows on the imports of capital goods in developing countries |
Authors: | Fidrmuc, J Gaibulloev, K Mirzaei, A Moore, T |
Keywords: | international capital flows;capital goods;financial dependence;developing countries |
Issue Date: | 29-Dec-2023 |
Publisher: | Elsevier |
Citation: | Fidrmuc, J. et al. (2024) 'The effect of capital inflows on the imports of capital goods in developing countries', Journal of Corporate Finance, 0 (accepted, in press), pp. 1 - 21. doi: . |
Abstract: | This paper examines the relationship between capital inflows and import of capital goods to credit-constrained industries in developing countries. Using data of 11 industrial sectors in 57 countries for 2000–2020, we find that financially dependent industries import disproportionately more capital goods if they operate in countries that receive more foreign funds. A host of robustness tests, including instrumental variables estimation, confirm our main finding. We also document that: (i) the established nexus breaks down during the global financial crisis, (ii) the observed relationship is mainly due to the direct investment via equity, and (iii) host countries tend to import relatively more capital goods from G7 economies. Overall, our results suggest that one channel through which capital inflows affect economic growth is by alleviating firms' financial constraints, thereby enabling firms to acquire more advanced capital goods. |
Description: | Data availability: Data will be made available on request. |
URI: | https://bura.brunel.ac.uk/handle/2438/27992 |
DOI: | https://doi.org/10.1016/j.jcorpfin.2023.102531 |
ISSN: | 0929-1199 |
Other Identifiers: | ORCID iD: Tomoe Moore https://orcid.org/0000-0002-9612-1020 |
Appears in Collections: | Dept of Economics and Finance Embargoed Research Papers |
Files in This Item:
File | Description | Size | Format | |
---|---|---|---|---|
FullText.pdf | Embargoed until 29 December 2025 | 700.65 kB | Adobe PDF | View/Open |
This item is licensed under a Creative Commons License