Abstract
This paper presents empirical evidence suggesting that the volatility, trend-growth, and shock-duration of terms-of-trade (TOT) are important drivers of the degree and composition of international financial integration (IFI). Our results are based on a panel of 55 primary-commodity exporting countries during 1980-2007. The findings reveal that TOT trend-growth has larger impact on IFI compared to TOT volatility. Also, higher TOT volatility is robustly associated with greater cross-holdings of foreign assets and lower cross-holdings of foreign liabilities. Another notable finding is that longer duration of TOT shocks seems to shift IFI towards equity assets.
| Original language | English |
|---|---|
| Pages (from-to) | 335-353 |
| Number of pages | 19 |
| Journal | Journal of International Financial Markets, Institutions and Money |
| Volume | 33 |
| DOIs | |
| Publication status | Published - Dec 1 2014 |
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Keywords
- Developing countries
- Financial globalization
- Foreign direct investment
- International investment positions
- Portfolio investment
- Terms-of-trade
ASJC Scopus subject areas
- Finance
- Economics and Econometrics
Cite this
How does terms-of-trade behavior shape international financial integration in primary-commodity exporting economies? / Saif Al-Abri, Almukhtar.
In: Journal of International Financial Markets, Institutions and Money, Vol. 33, 01.12.2014, p. 335-353.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - How does terms-of-trade behavior shape international financial integration in primary-commodity exporting economies?
AU - Saif Al-Abri, Almukhtar
PY - 2014/12/1
Y1 - 2014/12/1
N2 - This paper presents empirical evidence suggesting that the volatility, trend-growth, and shock-duration of terms-of-trade (TOT) are important drivers of the degree and composition of international financial integration (IFI). Our results are based on a panel of 55 primary-commodity exporting countries during 1980-2007. The findings reveal that TOT trend-growth has larger impact on IFI compared to TOT volatility. Also, higher TOT volatility is robustly associated with greater cross-holdings of foreign assets and lower cross-holdings of foreign liabilities. Another notable finding is that longer duration of TOT shocks seems to shift IFI towards equity assets.
AB - This paper presents empirical evidence suggesting that the volatility, trend-growth, and shock-duration of terms-of-trade (TOT) are important drivers of the degree and composition of international financial integration (IFI). Our results are based on a panel of 55 primary-commodity exporting countries during 1980-2007. The findings reveal that TOT trend-growth has larger impact on IFI compared to TOT volatility. Also, higher TOT volatility is robustly associated with greater cross-holdings of foreign assets and lower cross-holdings of foreign liabilities. Another notable finding is that longer duration of TOT shocks seems to shift IFI towards equity assets.
KW - Developing countries
KW - Financial globalization
KW - Foreign direct investment
KW - International investment positions
KW - Portfolio investment
KW - Terms-of-trade
UR - http://www.scopus.com/inward/record.url?scp=84907681985&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84907681985&partnerID=8YFLogxK
U2 - 10.1016/j.intfin.2014.09.002
DO - 10.1016/j.intfin.2014.09.002
M3 - Article
AN - SCOPUS:84907681985
VL - 33
SP - 335
EP - 353
JO - Journal of International Financial Markets, Institutions and Money
JF - Journal of International Financial Markets, Institutions and Money
SN - 1042-4431
ER -