Connecting two views on financial globalization

Wei, Shang Jin

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Connecting two views on financial globalization

Date

2006

Authors

Wei, Shang Jin

Abstract

To understand why developing countries do not automatically benefit from financial globalization, both the need for a minimum institutional quality (the threshold hypothesis) and the possibility of varying volatility of different types of capital flows (the composition hypothesis) have been suggested. This paper contends that the two hypotheses are intimately linked, and provides supportive empirical evidence. J. Japanese Int. Economies 20 (4) (2006) 459-481.