The Study On The Impacts Of International Capital Flow On Domestic Credit Fluctuation

In order to share the bonus of the global economic integration,the emerging markets have gradually liberalized the domestic capital controls.The impact of the huge amount of international capital inflows on emerging economies,including Chinese,has brought new challenges to international capital flow supervision policy.Previous studies have shown that the concentration of domestic credit may lead to excessive expansion of domestic financial risks,and eventually led to the outbreak of the financial crisis.Therefore,this paper studied the influence mechanism of international capital flows on domestic credit fluctuations to understand whether the flow of international capital affect the stable domestic credit.Firstly,based on reviewing the research paper of domestic and foreign economists about international capital flows and domestic credit problems,this article introduces its research ideas and concepts related to international capital flows.On this basis,the impact mechanism of international capital flows on domestic credit fluctuations in emerging markets is deeply analyzed.Secondly,the thesis chooses the G20 group as the research sample and classifies them as emerging market economies and developed countries according to the definition of IMF.The international capital flows are introduced by the total amount and its structure while the domestic credit volatility of emerging market countries and developed country were described.Then the 9 emerging economies and 9 developed countries’ data of 1 quarter of 2006 to the 4 quarter of 2015 have been collected to establish the variable intercept panel regression model for the empirical test.The different types of international capital flows’ impact on the household sector’s and the non-financial corporate sector’s credit growth are different.It draws the following conclusions.For emerging market,the impact of international direct investment and international securities investment on household sector credit growth and non-financial corporate sector of are both positive.And the international securities investment impact on domestic credit changes is greater than the international direct investment’s impact.Besides,other investment only can influence the domestic household sector credit.What’s more,the impact of international capital flows on emerging economies’ domestic credit is more significant than its on developed countries.So the emerging economies can regulate the flow of international capital to promote credit growth’s stability.Finally,based on the comprehensive consideration of theoretical analysis and empirical research,the paper introduces the experience of other countries’ supervision experience on international capital flow regulation.Furthermore,the article gives some advices about the China government’s supervision policy on the international capital flow and proposed the emerging economies coordination and cooperation advices on the supervision of international capital flows policy.