ISSN 0253-2778

CN 34-1054/N

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Analysis of the influencing factors of Chinas international capital flow

  • 1.

    School of Management, University of Science and Technology of China, Hefei 230026, China

  • 2.

    Institute of Finance, Development Research Center of the State Council, Beijing 100010, China

  • 3.

    Treasury Department, Postal Savings Bank of China, Beijing 100808, China

Cite this:
https://doi.org/10.3969/j.issn.0253-2778.2015.03.011
  • Received Date: 06 November 2012
  • Accepted Date: 07 December 2012
  • Rev Recd Date: 07 December 2012
  • Publish Date: 30 March 2015
    Abstract

  • Abstract

    Through principle component analysis, the general factors affecting international capital flows were obtained. Then by dividing the international capital flows into long-term and short-term capital flows, further analysis of the factors was conducted. The results of empirical study show that increased level of openness, increasing economic output, increased labor compensation and moderate inflation may bring in FDI, which can be inhibited by an appreciation of an RMB; increasing expectation of RMB appreciation and a boom of Chinese real estate and security markets are driving short-term capital into China; increased level of openness and interest rate differentials have no influence on short-term capital inflows.

    Abstract

    Through principle component analysis, the general factors affecting international capital flows were obtained. Then by dividing the international capital flows into long-term and short-term capital flows, further analysis of the factors was conducted. The results of empirical study show that increased level of openness, increasing economic output, increased labor compensation and moderate inflation may bring in FDI, which can be inhibited by an appreciation of an RMB; increasing expectation of RMB appreciation and a boom of Chinese real estate and security markets are driving short-term capital into China; increased level of openness and interest rate differentials have no influence on short-term capital inflows.
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    • References(21)
  • [1]
    Prasad E, Wei S J. The Chinese approach to capital inflows: Patterns and possible explanations[R]. Cambridge, MA: NBER, 2005.
    [2]
    Ralhan M. Determinants of capital flows: A cross-country analysis[J]. Econometrics Working Paper, 2006: EWP0601.
    [3]
    Nordal K B. Country risk indices and valuation of FDI: A real options approach[J]. Emerging Markets Review, 2001, 2(3):197-217.
    [4]
    Reinhart C M, Rogoff K S. Serial default and the “paradox” of rich to poor capital flows[R]. Cambridge, MA: NBER, 2004: NBER Working Paper No. 10296.
    [5]
    Papaioannou E. What drives international financial flows? Politics, institutions and other determinants[J]. Journal of Development Economics, 2009, 88(2): 269-281.
    [6]
    Marchiori L. Demographic trend and international capital flows in an integrated world[J]. Economic Modeling, 2011(5):2 100-2 120.
    [7]
    Calvo G A, Leiderman L, Reinhart C M. Capital inflows and real exchange rate appreciation in Latin America: The roles of external factors[J]. IMF Staff Paper, 1993, 40(1): 108-151.
    [8]
    Cardoso E A, Goldfajn I. Capital flows to Brazil: The endogeneity of capital controls[R]. Washington D C: IMF,1997: WP/97/115.
    [9]
    Fratscher M. Capital flows, push versus pull factors and the global financial crisis[R]. Cambridge, MA: NBER, 2011: NBER Working Paper No. 17357.
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    Ghosh A R, Qureshi M S. What drives surges in capital flows?[R]. Washington D C: IMF, 2012.
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    范小云,潘赛赛. 国际资本流动理论的最新发展及其对中国的启示[J].国际金融研究,2008(9):61-67.
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    汪洋. 1994年以来中国的资本流动研究[J].国际金融研究, 2004(6)：67-73.
    [13]
    王琦.关于我国国际资本流动影响因素计量模型的构建和分析[J].国际金融研究, 2006(6):64-69.
    [14]
    Wang Guosong, Yang Yang. Empirical study of the effecting factors on Chinas international capital flows[J]. Journal of International Trade, 2006(5):100-107.
    王国松,杨扬. 我国国际资本流动影响因素的实证研究[J].国际贸易问题, 2006(5):100-107.
    [15]
    刘立达. 中国国际资本流入的影响因素分析[J]. 金融研究，2007(3)：62-69.
    [16]
    王世华,何帆. 中国的短期国际资本流动:现状、流动途径和影响因素[J]. 世界经济, 2007(7):12-23.
    [17]
    Feng Cai. The factors influencing short-term international capital flow in China: An empirical study based on the data of 1994-2007[J]. Finance & Economics, 2008(6):32-39.
    冯彩.我国短期国际资本流动的影响因素:基于1994-2007年的实证研究[J]. 财经科学，2008(6):32-39.
    [18]
    Li Hong, Qian Li. The effect of RMB appreciation on Chinas cross-border capital flow[J]. Nankai Economic Studies, 2011(2)：16-27.
    李宏,钱利. 人民币升值对中国国际资本流动的影响[J].南开经济研究，2011(2)：16-27.
    [19]
    Shi Aixin, Xiao Chen. An empirical research on the causes of hot money flowing into mainland China from 1991 to 2010[J]. International Economics and Trade Research, 2011(8):47-63.
    石艾馨,萧琛. 1991-2010年热钱流入中国的动因分析[J].国际金融与投资, 2011(8):47-63.
    [20]
    Peng Xiaohui, Shi Qinghua. Lucass paradox and capital flows between urban and rural China[J]. Research on Economics and Management, 2012(3):65-72.
    彭小辉,史清华.“卢卡斯之谜”与中国城乡资本流动[J].经济与管理研究，2012(3):65-72.
    [21]
    Li Li. The multinational corporations factors effecting on FDI entry modes: Empirical analysis on logistic model[J]. Research on Economics and Management, 2010(11): 68-75.
    李莉. 跨国公司因素对FDI进入方式的影响:基于Logistic模型的实证分析[J].经济与管理研究，2010(11): 68-75.
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    [1]
    Prasad E, Wei S J. The Chinese approach to capital inflows: Patterns and possible explanations[R]. Cambridge, MA: NBER, 2005.
    [2]
    Ralhan M. Determinants of capital flows: A cross-country analysis[J]. Econometrics Working Paper, 2006: EWP0601.
    [3]
    Nordal K B. Country risk indices and valuation of FDI: A real options approach[J]. Emerging Markets Review, 2001, 2(3):197-217.
    [4]
    Reinhart C M, Rogoff K S. Serial default and the “paradox” of rich to poor capital flows[R]. Cambridge, MA: NBER, 2004: NBER Working Paper No. 10296.
    [5]
    Papaioannou E. What drives international financial flows? Politics, institutions and other determinants[J]. Journal of Development Economics, 2009, 88(2): 269-281.
    [6]
    Marchiori L. Demographic trend and international capital flows in an integrated world[J]. Economic Modeling, 2011(5):2 100-2 120.
    [7]
    Calvo G A, Leiderman L, Reinhart C M. Capital inflows and real exchange rate appreciation in Latin America: The roles of external factors[J]. IMF Staff Paper, 1993, 40(1): 108-151.
    [8]
    Cardoso E A, Goldfajn I. Capital flows to Brazil: The endogeneity of capital controls[R]. Washington D C: IMF,1997: WP/97/115.
    [9]
    Fratscher M. Capital flows, push versus pull factors and the global financial crisis[R]. Cambridge, MA: NBER, 2011: NBER Working Paper No. 17357.
    [10]
    Ghosh A R, Qureshi M S. What drives surges in capital flows?[R]. Washington D C: IMF, 2012.
    [11]
    范小云,潘赛赛. 国际资本流动理论的最新发展及其对中国的启示[J].国际金融研究,2008(9):61-67.
    [12]
    汪洋. 1994年以来中国的资本流动研究[J].国际金融研究, 2004(6)：67-73.
    [13]
    王琦.关于我国国际资本流动影响因素计量模型的构建和分析[J].国际金融研究, 2006(6):64-69.
    [14]
    Wang Guosong, Yang Yang. Empirical study of the effecting factors on Chinas international capital flows[J]. Journal of International Trade, 2006(5):100-107.
    王国松,杨扬. 我国国际资本流动影响因素的实证研究[J].国际贸易问题, 2006(5):100-107.
    [15]
    刘立达. 中国国际资本流入的影响因素分析[J]. 金融研究，2007(3)：62-69.
    [16]
    王世华,何帆. 中国的短期国际资本流动:现状、流动途径和影响因素[J]. 世界经济, 2007(7):12-23.
    [17]
    Feng Cai. The factors influencing short-term international capital flow in China: An empirical study based on the data of 1994-2007[J]. Finance & Economics, 2008(6):32-39.
    冯彩.我国短期国际资本流动的影响因素:基于1994-2007年的实证研究[J]. 财经科学，2008(6):32-39.
    [18]
    Li Hong, Qian Li. The effect of RMB appreciation on Chinas cross-border capital flow[J]. Nankai Economic Studies, 2011(2)：16-27.
    李宏,钱利. 人民币升值对中国国际资本流动的影响[J].南开经济研究，2011(2)：16-27.
    [19]
    Shi Aixin, Xiao Chen. An empirical research on the causes of hot money flowing into mainland China from 1991 to 2010[J]. International Economics and Trade Research, 2011(8):47-63.
    石艾馨,萧琛. 1991-2010年热钱流入中国的动因分析[J].国际金融与投资, 2011(8):47-63.
    [20]
    Peng Xiaohui, Shi Qinghua. Lucass paradox and capital flows between urban and rural China[J]. Research on Economics and Management, 2012(3):65-72.
    彭小辉,史清华.“卢卡斯之谜”与中国城乡资本流动[J].经济与管理研究，2012(3):65-72.
    [21]
    Li Li. The multinational corporations factors effecting on FDI entry modes: Empirical analysis on logistic model[J]. Research on Economics and Management, 2010(11): 68-75.
    李莉. 跨国公司因素对FDI进入方式的影响:基于Logistic模型的实证分析[J].经济与管理研究，2010(11): 68-75.
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