01993cas a2200253 a 4500 AALejournalIMF003332 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451875713 1018-5941 BD-DhAAL BD-DhAAL Mauro, Paolo. Institutions and the External Capital Structure of Countries / Paolo Mauro, Andre Faria. Washington, D.C. : International Monetary Fund, 2004. 1 online resource (31 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students A widespread view holds that countries that finance themselves through foreign direct investment (FDI) and portfolio equity, rather than bonds and loans, are less prone to crises. But what determines countries' external capital structures? In a cross section of emerging markets and developing countries, we find that equity-like liabilities (FDI and, especially, portfolio equity) as a share of countries' total external liabilities (or as a share of GDP) are positively and significantly associated with indicators of educational attainment, natural resource abundance, and especially, institutional quality. These relationships are robust to attempts to control for possible endogeneity, suggesting that better institutional quality may help improve countries' capital structures. The results might also provide an explanation for the observed correlation between institutional quality and the frequency of crises. Mode of access: Internet Faria, Andre. IMF Working Papers; Working Paper ; No. 2004/236 Full text available on IMF http://elibrary.imf.org/view/journals/001/2004/236/001.2004.issue-236-en.xml IMF e-Library