Financial globalization in emerging countries: diversification vs. offshoring

Francisco Ceballos (), Tatiana Didier () and Sergio Schmukler

No 6105, Policy Research Working Paper Series from The World Bank

Abstract: Financial globalization has gathered attention since the early 1990s because of its macro-financial implications and growing importance. But financial globalization has taken shape via different forms over time. This paper examines two important, concurrent dimensions of financial globalization: diversification and offshoring. The diversification dimension refers to the increase in foreign assets and liabilities in countries'portfolios. Offshoring is related to the reallocation of financial activities to international markets. The former focuses on who holds the assets, the latter on where transactions take place. The authors find that globalization via the diversification channel expanded throughout the world during the 2000s, as domestic residents invested more abroad and foreigners increased their investments at home, generating more cross-border holdings. However, financial globalization via offshoring displays more mixed patterns, with variations across markets and countries. The paper also shows that the nature of financing through both diversification and offshoring has improved for emerging countries.

Keywords: Debt Markets; Emerging Markets; Mutual Funds; Economic Theory&Research; Banks&Banking Reform (search for similar items in EconPapers)
Date: 2012-06-01
New Economics Papers: this item is included in nep-ifn and nep-opm
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Financial Globalization in Emerging Countries: Diversification vs. Offshoring (2012)
Working Paper: Financial Globalization in Emerging Countries: Diversification vs. Offshoring (2012)
Working Paper: Financial Globalization in Emerging Countries: Diversification vs. Offshoring (2012)
Working Paper: Financial Globalization in Emerging Countries: Diversification vs. Offshoring (2012)
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