Changing Trend of Capital Flows: The Case of India

Authors

  • Shailesh Gandhi IIM, Ahmedabad, Gujarat, India
  • Hemantkumar P. Bulsara S V National Institute of Technology, Gujarat, India
  • Vaishali S. Dhingra S V National Institute of Technology, Gujarat, India

DOI:

https://doi.org/10.32890/ijms2013.20.2.4

Keywords:

Globalization, emerging economies, economic integration, capital flows

Abstract

Many countries witnessed enormous increases in international capital mobility after globalization. This, in turn, has improved economic integration among emerging economies and developed nations. The trend of these cross country flows of capital discloses that non-debt creating private capital flows are dominating the official flows which come in the form of official grants and private debt flows. Moreover, the portfolio equity investment which shows tremendous growth has exposed individual countries to the risk of improved volatility and sudden stops. These trends, driven by globalization, have enabled the pursuit of higher returns and portfolio diversification as well as market-oriented reforms in many countries which have liberalized access to financial markets. As a new participant in the globalization wave, India went through several structural and policy changes only in the early 1990s. India introduced a New Economic Policy guided by the IMF and the World Bank with the intention of economic stabilization. This paper reviews several literature on fundamental aspects and some former empirical evidence about globalization and capital flows to emerging economies with special reference to India. It also highlights the adverse impact of hot money along with debt flow in India.
 
Keywords: Globalization, emerging economies, economic integration, capital flows.

Downloads

Download data is not yet available.

References

Abhijit, S. P., & Rajeswari, S. (2013). Management of capital flows in India: 1990–2011. Munich: Personal RePEc Archive.

Aggarwal, M. R. (2005). Macro economic adjustment, stabilization and sustainable growth in India: Looking back and to the future. India Towards Economic Super Power: A Journey of Economic, 92–109.

Barroso, J. M. D. (2009). Declaration on the preparation of the G20 Summit. Speech to the European Parliament, Strasbourg, France, 24 March.

Behind the Stock Market Boom. (1996, April 20­–27). Economic & political Weekly, pp. 979–980.

Bhagwati, J. (2004). In defense of globalization with a new afterword (1st ed.). New York: Oxford University Press.

Clements, B., & Gupta, S. (2004). Foreign aid: Grants versus loans. Washington: Internatioanal Monetary Fund.

Chandrashekhar, C. P., & Jayati, G. (2005). The crisis of state government debt. Macroscan. IJMS 20 (2), (71-104) (2013)

Chinn, M., & Ito, H. (2008). A new measure of financial openness. Journal of Comparative Policy Analysis, 10(3), 307–320.

Davis, D. R., & Weinstein, D. E. (2003). Market access, economic geography and comparative advantage: An empirical test. Journal of International Economics, 59, 1–23.

Edwards, S. (2007). Capital controls, sudden stops, and current account reversals. In S. Edwards (Ed.), Capital controls and capital flows in emerging economies: Policies, practices and consequences (pp. 73–120). University of Chicago Press. http://ijms.uum.edu.my/

Kant, C. (2010). Relationship between different types of private capital flows to developing country. Quantitative and Qualitative Analysis in Social Sciences, 4(1), 58–82.

Kaur, M., & Dhillon, S. S. (2010). Determinants of foreign instituional investors’ investment in India. Eurasian Journal of Business and Economics, 57–70.

Kawai, M., & Takagi, S. (2008). A survey of the literature on managing capital inflows. Asian Development Bank Institute Discussion Paper No. 100.

Keeley, B. (2009). International migration: The human face of globalization. Paris: OECD.

Kohli, R. (2003, February 22–28). Capital flows and domestic financial sector in India. Economic & Political Weekly, pp. 761–762.

Kose, M. A., Prasad, E. S., & Terrons, M. E. (2008). Does openness to international financial flows raise productivity growth? Journal of Internatioanl Money and Finance, 28(4), 554–580.

Kumar, R., Palit, A., & Singh, K. (2007). Sustainability of economic growth in India. The Centre for International Governance Innovation.

Lane, P., & Milessi-Ferreti, G. M. (2007). The external wealth of nations mark II: Revised and extended estimates of foreign assets and liabilities: 1970–2004. Journal of International Economics, 73(2), 223–250.

McKinnon, R. I. (1993). The order of economic liberalization: Financial control in the transition to a market economy. Baltimore: The Johns Hopkins University Press.

Milesi-Ferretti, G. M., & Tille, C. (2010). The great retrenchment: International capital flows during the global financial crisis. Centre For Economic policy Research. Paris School of Economics.

Mohan, R. (2008). Global financial crisis: Causes, consequences and India’s prospects. London: Bank for International Settlelemts.

Mohan, R. (2009). Capital flows and emerging market economies. Bank of International Settlement.

Ostry, J. D., Ghosh, A.R., Kim, J. I., & Qureshi, M.S. (2010). Fiscal Space. International Monetary Fund. IJMS 20 (2), (71-104) (2013)

Prasad, E. S. R. Rajan G., & A; Subramanian, A. (2007). Foreign capital and economic growth. Brookings Papers on Economic Activity, 1.

Prasad, E. S., & Rajan, R. (2008). A pragmatic approach to capital account liberalization. NBER Working Paper Series. National Bureau of Economic Research.

Rajan, R. G., & Subramanian, A. (2005). What undermines aid’s impact on growth? IMF Working Paper, International Monetary Fund.

Rădescu, O. D. (2008). The process of globalization in the world economy. International University of Moldova. http://ijms.uum.edu.my/

Reddy, Y. V. (2005). Overcoming challenges in a globalizing economy: Managing India’s external sector. Lecture delivered at the Indian Programme of the Foreign Policy Centre, London, 23 June.

Schembri, L. L., Santor, E., & Epstein, G. (2009). Should financial flows be regulated? In H. Bougrine & M. Seccareccia (Ed.), Introducing macroeconomic analysis: Issues, questions, and competing views. Toronto: Emond Montgomery Publications.

Siripala, N. S. P. (2003). Sri Lanka: Borrowing capacity assessment. Asian Development Bank.

Sullivan, A., & Sheffrin, M. (2003). Economics: Principles in action. New Jersey: Pearson Prentice Hall. (2000). Debt and reserve related indicators of external vulnerability. IMF. (2001). The challenge of maintaining long-term external debt sustainability.

World Bank, IMF. (2001). Trade policies, developing countries, and globalization. World Bank. ­(2002). Globalization,growth and poverty. Washington, DC.: World Bank and Oxford University. (2003). External debt statistics: Guide for compilers and users. IMF. ­(2005). Global development finance: Mobilizing finance and managing vulnerability. World Bank. (2008–2009). Annual Report. Reserve Bank of India. (2009–2010). Annual Report. Reserve Bank of India. ­(2010–2011). Annual Report. Reserve Bank of India. (2010–2011). Union budget and economic survey. Govt. of India. (2011–2012). Annual Report. Reserve Bank of India. ­(2011). World economic outlook. IMF. (2013). World economic outlook. IMF.

Downloads

Published

31-12-2013

Issue

Vol. 20 No. 2 (2013): International Journal of Management Studies (IJMS) Vol. 20, No. 2 December 2013

Section

Articles

Research impact

Harvested 2026-09-08
0 citations recorded so far

Counts differ between services because each indexes a different body of literature. None of them is the whole picture.

Identifiers DOI 10.32890/ijms2013.20.2.4