DETERMINANTS OF CAPITAL FLOWS IN THE EMERGING ECONOMIES

The two forces that has reshaped the global economic landscape are: Globalization and Technological revolution. There has been significant degree of financial liberalization i.e. easing controls on FDI & FII flows especially among emerging economies that has paved the way for massive flows of capital from the developed economies, but at the same time the rigid structures, lack of accountability, unorganized markets, outdated technology etc. have also led to flight of capital flows. A meta study has been undertaken to identify the major factors that influence the capital flows across economies and their policy implications in the short and long term. The results of the study have validated many theories as well as thrown quite a few surprises in terms of firm-specific and institutional factors that play a role in the investment decision-making.

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Keywords: Global Economic Landscape, Globalization, Technological Revolution, FDI & FII.


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