This section provides information on research that has been conducted on topics related to international capital markets. It focuses on several subjects in this field relevant to the EU, developing countries and their economic relations, such as:

• International financial architecture (IFA) including general aspects of IFA, international financial standards and codes (S&Cs), sovereign debt work-out mechanisms and principles of international financial institutions (IFIs).
• Foreign direct investment (FDI) including determinants of FDI, effects on productivity and competitiveness, technological spill-over effects and the relations between trade and FDI.

Publications covering both IFA and FDI

Global Development Finance 2003 – Striving for stability in development finance, World Bank, 2003, Washington D.C.

This document discusses some of the aspects of capital markets relevant for developing countries. Among others attention is given to the net outflow of capital from developing countries. Developing countries pay back debts to creditors in developed countries. Since a few years, these payments are at the aggregate level no longer financed through attracting new funds from foreign creditors. As a result, the report shows that developing countries are becoming less dependent on loans from abroad. The decreasing dependency is also related to the development of local-currency bond markets.

Remittances have been increasing over the past few years and provide many developing countries with relatively stable capital inflows. FDI also is an important source of capital, although total world FDI flows have been declining since 1999. The importance of FDI flows stems from their long-term character and potential spill-over effects. Unlike debt investors, foreign direct investors are not wary to invest in developing countries since part of their profit is depending on operations in developing countries (cost advantages or access to local markets).

In addition to remittances and FDI, the document reviews other global trends on international capital markets.

For the document click here. Previous editions of the Global Development Finance are available for the years 2001 and 2002.