Nexus between Institutional Quality and Capital Inflows at Different Stages of Economic Development

What is it about?

We examine the determinants of capital inflows for a global sample of countries at various stages of economic development, namely factor-, efficiency-, and innovation-driven stages. We investigate the effect of institutional quality on capital inflows.

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Why is it important?

Our distinctive contribution is the inclusion of a global data set for countries at different levels of economic development. We use a novel panel data set of capital inflows, institutional quality factors, and macroeconomic absorptive capacity factors for 135 countries over the period 2006–2014.