Time: 13:00-15:00 (UK Time), Wednesday, 24 May 2023
Presenter: Dr Tomoe Moore, Brunel University London
Chair: Professor Victor Murinde, SOAS University of London

Abstract
In developing countries, financial constraints can be a severe barrier for firms sourcing capital goods from foreign countries, particularly in industries that are financially more dependent. In this paper, we examine the extent to which capital inflows assist industries in importing more capital goods, by analyzing data from 11 industrial sectors in 57 countries over the period 2000-2020. We find that, financially dependent industries indeed import disproportionately more capital goods, if they operate in countries that receive more foreign funds. Our robustness tests indicate that endogeneity issues do not alter our main finding.  Additionally, we document that: i) the established nexus breaks down during the global financial crisis, ii) by decomposing capital inflows into direct and portfolio investments the result reveals that the observed relationship is mainly driven by equity direct investment and iii) host countries tend to import relatively more quality capital goods from G7 economies. Overall, our results shed light on the channel through which capital inflows affect economic growth, that is, by alleviating financial constraints with the increased financial resources from abroad, firms are able to acquire more advanced capital goods, which, in turn, boosts growth. 

Presenter

Tomoe Moore is a Senior Lecturer (Associate Professor) at Brunel University London.  She obtained her PhD at Loughborough University funded by the DFID, UK government under the ‘Finance and Development’ program.  Previously, she taught at Coventry University and also at Loughborough University.    

Her research areas include flow-of-funds policy analysis, economic development for developing countries and banking, in general.  Among others, she has a technical expertise in modelling a complex system-wide flow of funds policy analysis, widely attracting academic researchers and policymakers being invited as a speaker or consultant by e.g. MIT, central banks and Ministry of Finance in some African countries.  She has recently started re-developing the compilation of a flow of funds matrix based on the IMF database for developing countries.   

Her publications have appeared in highly ranked international journals such as the Journal of Corporate Finance, Economica, Journal of Banking and Finance, World Development, Economic Development and Cultural Change, Journal of Development Studies and European Journal of Finance.