Template-Type: ReDIF-Paper 1.0
Author-Name:  Horacio Aguirre
Author-Name-First: Horacio
Author-Name-Last: Aguirre
Author-Name:  Rodrigo Pérez Ártica
Author-Name-First: Rodrigo
Author-Name-Last: Pérez Ártica
Title: Non-bank Financial Intermediation and Capital Flows: Evidence from Emerging Market Economies
Abstract:  We look at the interplay of non-bank financial intermediation (NBFI) and capital flows in emerging market economies (EMEs). We examine whether gross capital flows to twenty-four EMEs, including seven Latin American economies, are related to foreign bond holdings of non-bank financial intermediaries, over and above local and global factors. We estimate panel data models that account for cross-country correlation, using quarterly data from the dataset by Arslanalp and Tsuda (2014) in the 2004-2021 period. We discriminate flows by sectors (total, government, corporate and banking), include time and country fixed effects, and employ several definitions of our variable of interest: as a categorical variable, capturing  countries with the largest share of foreign nonbank investors, or as a direct measure of their participation. We also carry out event studies around the occurrence of the global financial crisis and the covid-19 crisis. Preliminary results suggest that: NBFI are “pipe” factors driving flows (in addition to “push” and “pull” ones), whose impact changes over time and depending on the type of flow; in some cases, foreign NBFI magnifies the impact of global factors on capital inflows, while they weaken the pull of local factors; and NBFI amplified outflows in the market turmoil of 2020.
Length:  35 pages
Creation-Date:  2022-11
File-URL: https://aaep.org.ar/works/works2022/4534.pdf
File-Format: Application/pdf
Number: 4534
Classification-JEL: C23, E44, F32, G23
Handle: RePEc:aep:anales:4534