Study On The Influence Factors Of Cross-Border Capital Flows

With the integration process of global economy and finance, the cross-border capital flows among different countries are being more frequent and complex. Its influences on economic and monetary polic ies are deepening. These international capitals have the characteristics of high fluidity, uncertain flow directions, and strong speculation. At the same time China's financ ial market is imperfect, and the regulatory system is not sound, which could bring great hidden trouble to its economic and financ ial development.Based on the review and summary of the classical theory of international capital flows, this thesis would use the data of 64 countries from 1990 to 2012, and analyze cross-border capital flows from two aspects, net capital flows and total capital flows. When considering net capital flows, we refer World Bank's residual method and hot money method. When considering total capital flows, we start from the financ ial account of balance of payments. We choose some possible influence factors, which include real interest rate, exchange rate, and rate of return on stock market and estate market. We also choose some macroeconomic factors such as inflation rate, GDP per capita, GDP growth rate, broad money supply, stock market capitalization, foreign trade indicator and capital account openness indicator. When choosing econometric model, we consider the fixed effect model with structural breaks. We use the PGMM to get the corresponding regression results. We find that real interest rate and exchange rate have s ignificant influence on cross-border capital flows, which indicates that capital is profit-driven.According to the analysis of cross-border capital flows, this thesis gives some policy suggestions such as marketization of interest rate and exchange rate, setting up the capital supervision system and relevant legal system.