Evolution of Bilateral Capital Flows to Developing Countries at Intensive and Extensive Margins
研究了低收入国家资本流动的性质及影响外国投资者决策的因素，发现市场进入成本对低收入国家非常不利，并确认劳动生产率是吸引资本流入的稳健因素。
Abstract Motivated by the rise in capital flows to low‐income countries (LICs), we examine the nature of these flows and the factors affecting foreign investors' decision. Recognizing the presence of fixed investment costs, we analyze capital flows at both intensive and extensive margins. To fix ideas, we resort to the gravity literature for the estimating relationships which we embed into a two‐tier econometric framework with cross‐sectional dependence. Our main finding is that market entry costs are statistically and economically very detrimental to LICs. We also obtain the gravity‐type relationship for the destination income unconditionally but not after conditioning on relevant variables, as well as establish labor productivity as a robust attractor of capital inflows.