Akademik Veri Yönetim Sistemi
OPEN ECONOMIES REVIEW, 2026 (SSCI, Scopus)
This study investigates whether the long-run and short-run impacts of capital inflows and their main components (portfolio equity, FDI and other investments) are expansionary or contractionary in emerging market and developing economies (EMDE). In this context, we also consider the key main growth determinants suggested by the endogenous growth theory along with variables representing global financial conditions and capital openness. To investigate the impacts of capital inflows and their main components on growth, we employ both fully-modified ordinary least squares and panel autoregressive distributed lag estimation methods. The estimation results suggest the presence of cointegration between the variables and support the convergence hypothesis. We find that all types of capital inflows, except portfolio equity, are expansionary both in the short and long-run. Portfolio equity inflows tend to enhance economic growth only in the long-run. Moreover, the impacts of foreign and domestic savings on growth indicate that they are complementary rather than substitutes. Finally, our findings suggest that capital inflows encourage growth in good times but dampens in bad times leading to magnify the amplitude of boom and bust cycles.