| This study defines, typifies, and measures fleeting capital as the addition of short-term direct private investment (STDPI) and the exposure of global banks in letters of credit (LC) in South America; further correlating fleeting capital with final consumption expenditures (consumption). The definition of fleeting capital is founded on the examination of the common financial characteristics of STDPIs and LCs. Furthermore, the similar correlational direction and magnitude between STDPI, LCs, and fleeting capital with consumption in South America from 1992 to 2008, provide quantitative support for the definition of fleeting capital. The typification of fleeting capital is based on the economic impact of capital golondrina in South America. Data for the study variables was collected from the United Nations Conference on Trade and Development (UNCTAD), the United Nations Statistics Division (UNSD), and the 10K Annual Reports filed by global banks with the U.S. Securities and Exchange Commission (SEC) where the amounts of confirmed or reconfirmed LCs for their South American correspondents are specified. Through purposeful convenience sampling of secondary data across a 17-year period, fleeting capital is operationalized as a construct measure based on the summation of the measures for STDPI and LCs. The Kolmogorov-Smirnov test (K-S test) statistic reveals consumption's K.S.=.82 and p-value=.509; LCs with K.S.=.75 and p-value=.635; and fleeting capital with K.S.=1.26, p-value=.084, are normally distributed. Although STDPI is not normally distributed with K.S.=1.77, p-value=.004, there is a significant positive correlation between this variable and consumption, Spearman's Rho=.706, p-value=.002. Significant positive correlations were measured between LCs and consumption, Pearson's r=.834 with a p-value=.000. The conclusion that fleeting capital and consumption have a high correlation is supported by Spearman's Rho=.828, p-value=.000. However, the regression model where fleeting capital is the independent variable and consumption the dependent variable measured an R2 of 0.744, this significant positive correlation shows that the greatest contributor is the intercept, meaning that fleeting capital could not be used to predict consumption, a conclusion congruent with economic theory. It is recommended that this investigation be used to support qualitative studies about the reasons for the existence of fleeting capital and its effect on economic and human development. |
