Degree Year


Document Type

Thesis - Open Access

Degree Name

Bachelor of Arts




Peter Montiel


Private capital, Developing countries, Investment


This paper attempts to understand what motivates and determines private capital inflows in developing counties. I intend to examine whether different types of flows (in this paper I will focus only on FOI and PFI as they dominate private investment flows today) depend on different factors, whether these factors are domestic or international and which of these factors are within the scope and reach of the host developing countries. In my paper, after providing some background information on FOI and PFI, I will then review previous studies and work based on the subject of FOI and PFI flows. I will go on to construct and empirically test structural models of FOI and PFI, and proceed with an empirical analysis. Based on these findings, I hope to be able to identify which factors a country should pay close attention to according to the individual composition of their capital inflows, and then examine appropriate policy responses to avoid a shock resulting from large, sudden outflows.

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Economics Commons