How do International Financial Flows to Developing Countries Respond to Natural Disasters?
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Antonio C. David
This paper uses multivariate dynamic panel analysis to examine the response of international financial flows to natural disasters. The models estimated for a large sample of developing countries point to differentiated responses of specific types of financial flows. The results show that remittance inflows increase significantly in response to shocks to both climatic and geological disasters, thus confirming their compensatory nature. The models suggest a nuanced role for foreign aid. While the responses of aid flows to natural disaster shocks in general tend not to be statistically significant, international assistance to low income countries increases following geological disaster shocks. Furthermore, the results show that typically, other private capital flows (bank lending and equity) do not attenuate the effects of disasters and in some specifications, even amplify the negative economic effects of these events.
©2012 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Articles in the same Issue
- Article
- How do International Financial Flows to Developing Countries Respond to Natural Disasters?
- The Impact of the Movement of Labour: Results from a Model of Bilateral Migration Flows
- The Impact of Chinese Purchases of U.S. Government Debt on the Treasury Yield Curve
- Governments of the Left and Openness to Imports
- What's New in Our World?
- International Financial Integration, Investment and Economic Performance in Sub-Saharan African Countries
- Greece's "Unpleasant Arithmetic" Containing the Threat to the Global Economy
- The Impacts of Trade Liberalisation and Technological Change on GDP Growth in Indonesia: A Meta Regression Analysis
- Growth Diagnostics: The Puzzle of Pakistan's Lagging Economic Growth
