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The sources of international investment income in emerging market economies
Author(s) -
Joyce Joseph P.
Publication year - 2021
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/roie.12523
Subject(s) - foreign portfolio investment , economics , foreign direct investment , portfolio investment , openness to experience , investment (military) , monetary economics , emerging markets , comprehensive income , international economics , balance of payments , open ended investment company , return on investment , gross income , market economy , macroeconomics , production (economics) , psychology , social psychology , tax reform , politics , political science , law , state income tax
We investigate international investment income flows in 26 emerging market countries during the period of 1998–2015. Net investment income registered a deficit for this group of countries of between 2% and 3% of GDP during this period. This deficit has been dominated by payments on foreign direct investment liabilities, which is consistent with the change in the composition of the external liabilities of these countries. Our results indicate that both capital account and trade openness are associated with the deficits on direct investment income. In addition, there was a small deficit in portfolio investment income, which is affected by the development of domestic financial markets and investor protection. Other investments’ income and the income from foreign exchange reserves have a negligible role in total investment income.