International Capital Flow and Global Imbalance: from Perspectives of Institution and Financial Development
YU Jing-wen1,PENG Wei2,ZHOU Zhi-liang3
1.School of Economics, Fudan University, Shanghai 200433, China; 2.School of Economics, Zhongnan University of Economics and Law, Wuhan 430079, China; 3.Peoples Bank of China, Beijing 100037, China
Abstract This paper analyzes the role of institution and financial development in determining the international capital flow with the data by Lane and Milesi-Ferretti (2007). The legal origin, the mortality and population density in 1500s used as instruments for institution and financial development to infer the causal effect of institution and financial development on capital flow. Furthermore, the institution quality is unbundled to investigate the influence of different institution qualities on international capital flow. The results illustrates that the institution quality stimulates all three kinds capital inflows. However, the financial development cannot attract FDI inflow. The government effectiveness has the direct effect on the three kinds capital flows.
TU Jing-Wen,BANG Gui,ZHOU Zhi-Liang. International Capital Flow and Global Imbalance: from Perspectives of Institution and Financial Development. Economic Survey, 2013, 1(5): 0128.
2013, Vol. 1 
