02251cas a2200265 a 4500 AALejournalIMF014341 230101c9999 xx r poo 0 0eng d 5.00 USD 9781484353349 1018-5941 BD-DhAAL BD-DhAAL Adler, Gustavo. Global Financial Shocks and Foreign Asset Repatriation : Do Local Investors Play a Stabilizing Role? / Gustavo Adler, Marie-Louise Djigbenou, Sebastian Sosa. Washington, D.C. : International Monetary Fund, 2014. 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 We study the dynamic response of gross capital flows in emerging market economies to different global financial shocks, using a panel vector-autoregressive (PVAR) setting. Our focus lies primarily on the potentially stabilizing role played by domestic investors in offsetting the response of foreign investors to global shocks. We find evidence of such role, but its existence and magnitude depend on the nature of the shock. Local investors play a meaningful stabilizing role in the face of global uncertainty shocks, as well as shocks to long-term U.S. interest rates. However, while in the former case, sizeable asset repatriation largely offsets the retrenchment of non-residents, in the latter case the extent of the offsetting is much more limited. Meanwhile, residents and non-resident behave alike in response to short-term U.S. interest rate shocks, pulling capital away from emerging markets, although magnitudes are not economically significant. The results shed light on the potential impact of the Fed's QE tapering on emerging market economies. Mode of access: Internet Djigbenou, Marie-Louise. Sosa, Sebastian. IMF Working Papers; Working Paper ; No. 2014/060 Full text available on IMF http://elibrary.imf.org/view/journals/001/2014/060/001.2014.issue-060-en.xml IMF e-Library