Abstract:

While huge increases in international capital movements due to financial liberalization policies after 1980s have increased capital accumulation of developing countries, they have also triggered some growth affecting dynamics such as technological information and human capital. The empirical studies suggest that capital inflows might have different effects on countries’ economic growths. In this study, using panel data test and estimation techniques, the effects of international capital movements on economic growth of developing countries are investigated for the period 1980-2005. The results are consistent with theoretical and empirical literature revealing that while foreign direct investment and portfolio investment have positive effects, short term capital investments have negative effects on economic growth of countries in the sample

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