Capital Inflows, Equity Issuance Activity, and Corporate Investment

Calomiris, Charles W. ; Larrain, Mauricio ; Schmukler, Sergio L.

World Bank, Washington, DC

关键词: CAPITAL FLOWS;    CORPORATE FINANCE;    EMERGING MARKET ECONOMIES;    DOMESTIC INVESTORS;    FOREIGN INVESTORS;   

DOI  :  10.1596/1813-9450-8405
RP-ID  :  WPS8405

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper uses issuance-level data tostudy how equity capital inflows that enter emerging marketeconomies affect equity issuance and corporate investment.It shows that foreign inflows are strongly correlated withcountry-level issuance. The relation reflects the behaviorof large issuers issuing in domestic equity markets and thatof firms issuing in international markets. Those larger,more liquid, and highly valued firms are the ones morelikely to raise equity when their country receives capitalinflows. To identify supply-side shocks, capital inflowsinto each country are instrumented with exogenous changes inother countries' attractiveness to foreign investors.Shifts in the supply of foreign capital are importantdrivers of increased equity inflows. Instrumented inflowslead a subset of firms (large domestic issuers and foreignissuers) to raise new equity, which they use to fundinvestment. Corporate investment increases between one-tenthand four-tenths the amount of foreign equity capitalentering the country.