The impact of population ageing on international capital flows

Narciso, Alexandre (2010): The impact of population ageing on international capital flows.

Abstract

This paper is oriented to study the relationship between demographical factors and international capital flows. We analyse the impact of ageing on foreign direct investments (FDI) and foreign portfolio investments (FPI) on a bilateral level. Firstly we present a theoretical foundation of the relationship and then we test it by an empirical model. Theoretical foundations are based on the lifecycle hypothesis and overlapping generations model in a demographic context. The bilateral FDI and FPI are modelled by using fixed effects balanced panel data. The results suggest that the current and future age structure of the nation has significant effect on current international capital flows.

• Item Type: MPRA Paper
• Language: English
• Keywords: International Capital Flows; Demography; Capital Mobility; FDI; Portfolio Investment
• Subjects: G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets; E - Macroeconomics and Monetary Economics > E0 - General > E00 - General; F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J20 - General

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