The Evolving Role of China and India in the Global Financial System

Lane, Philip R.; Schmukler, Sergio L.

doi:10.1007/s11079-007-9044-6

Cited by 15 publications

(9 citation statements)

References 21 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…It is plausible that much of this outward expansion will be regionally focused, in view of the influence of gravity factors on international investment patterns (Lane and Schmukler, 2007;Lane and Milesi-Ferretti, 2008b;Park 2013;Park and Mercado, 2014). For instance, Committee on the Global Financial System (2014) highlight the scope for increased regional cross-border integration across the banking systems of emerging market economies.…”

Section: Discussionmentioning

confidence: 99%

International Financial Integration in the Aftermath of the Global Financial Crisis

2017

View full text Add to dashboard Cite

This paper documents the evolution of international financial integration since the global financial crisis using an updated dataset on external assets and liabilities, covering over 210 economies for the period 1970-2015. It finds that the growth in cross-border positions in relation to world GDP has come to a halt. This reflects much weaker capital flows to and from advanced economies, with diminished cross-border banking activity, and an increase in the weight of emerging economies in global GDP, as these economies have lower external assets and liabilities than advanced economies. Cross-border FDI positions have continued to expand, unlike positions in portfolio instruments and other investment. This expansion reflects primarily positions vis-à-vis financial centers, suggesting that the complexity of the corporate structure of large multinational corporations is playing an important role. The paper also explores the crosscountry drivers of foreign ownership of domestic debt securities, highlighting in particular the role of the euro debt crisis in explaining its evolution.

show abstract

Section: Discussionmentioning

confidence: 99%

International Financial Integration in the Aftermath of the Global Financial Crisis

2017

View full text Add to dashboard Cite

show abstract

“…Another issue that merits investigation is the role of governments-if any-in managing the configuration of foreign funds through the use of capital controls. Lane and Schmukler (2007), for example, pointed out that the governments of China and India steered foreign investors into equity investments, FDI in the case of China and portfolio equity in India. Such a strategy would be consistent with the general improvement in economic policies noted by the IMF (2012) and others.…”

Section: Conclusion and Extensionsmentioning

confidence: 99%

External Balance Sheets as Countercyclical Crisis Buffers

Joyce

2018

SSRN Journal

View full text Add to dashboard Cite

The external balance sheets of many emerging market countries are distinguished by their holdings of assets primarily in the form of foreign debt and foreign exchange reserves, while their liabilities are predominantly equity, either FDI or portfolio. In this paper we investigate the claim that this composition served as a buffer for the emerging markets during the global financial crisis of 2008-09. We use data from a sample of 67 emerging market and advanced economies, and several indicators of the crisis are utilized: GDP growth rates in 2008-09, the occurrence of bank crises and the use of IMF credit. Our results show that those countries that issued FDI liabilities had higher growth rates, fewer bank crises and were less likely to borrow from the IMF. FDI assets, on the other hand, were linked to steeper contractions in GDP and more participation in IMF programs. Portfolio assets and liabilities had similar impacts, but their coefficients were less significant. Countries with debt liabilities, on the other hand, had more bank crises and were more likely to use IMF credit. We conclude that the "long debt, short equity" strategy of emerging markets did mitigate the effects of the global financial crisis.

show abstract

“…Lane and Schmukler (2007), for example, pointed out that the governments of China and India steered foreign investors into equity investments, FDI in the case of China and portfolio equity in India. Such a strategy would be consistent with the general improvement in economic policies noted by the IMF (2012) and others.…”

Section: Conclusion and Extensionsmentioning

confidence: 99%

External balance sheets as countercyclical crisis buffers

Joyce

2017

Int Econ Econ Policy

View full text Add to dashboard Cite

The Evolving Role of China and India in the Global Financial System

Cited by 15 publications

References 21 publications

International Financial Integration in the Aftermath of the Global Financial Crisis

International Financial Integration in the Aftermath of the Global Financial Crisis

External Balance Sheets as Countercyclical Crisis Buffers

External balance sheets as countercyclical crisis buffers

Contact Info

Product

Resources

About