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.

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Citation

Wei, Shang-Jin. "Connecting two views on financial globalization: Can we make further progress?" Journal of the Japanese and International Economies 20 (2006): 459-481.

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