Open Seminar. Robert Vermeulen “Net Foreign Asset (Com)position: Does Financial Development Matter?“
Eesti Pank Open Seminar (in English). Robert Vermeulen from the Dutch central bank talks about his research paper “Net Foreign Asset (Com)position: Does Financial Development Matter?”.
To register for this free seminar please call 6680 758 or send an email to eve.magin [at] eestipank.ee before 6 May.
Net Foreign Asset (Com)position: Does Financial Development Matter?
Robert Vermeulen (De Nederlandsche Bank) and Jakob de Haan (De Nederlandsche Bank/ University of Groningen/ CESifo)
We investigate the relationship between a country̕ s domestic financial development and the (composition of its) net foreign asset position using a pooled mean group estimator and data for 51 countries during the period 1970–2007. The results show that financial development reduces country̕ s long-run net foreign asset position. In addition, financial development leads to higher net equity and lower net debt positions. These findings confirm the theoretical predictions of Mendoza et al. (2009). The results are robust to using different indicators of financial development and inclusion of the level of development of a country in the cointegrating relationship.