According to recent research, external factors are key determinants of capital flows to emerging market countries. They are among the causes of high capital flow volatility that, in turn, leads to high levels of macroeconomic volatility. We postulate that, along with political governance,...

Specific information on trade and financial markets across international borders is costly to acquire. Sellers and buyers rely instead on information obtained from partner behavior in other countries. Three channels are identified through which information is disseminated in import and equity...

According to recent research, external factors and political governance considerations are key determinants of capital flows in Latin America. We postulate that corporate governance is a crucial determinant as well. We show that while the region is characterized by relatively low levels of...

Sudden Stops in net capital flows can be prevented when the actions of domestic investors offset a reduction in foreign lending. This paper presents evidence that while sudden stops in gross inflows—i.e., a tightening of the external borrowing constraint—are associated with global conditions...

Sudden stops in net capital flows can be prevented if domestic investors either repatriate foreign-held assets or roll over their local asset holdings when foreign investors stop lending or sell off their local asset holdings. This paper presents evidence showing that domestic factors such as...