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APPENDIX. Data Sources
IFIGDP Sum of total foreign assets and liabilities (net of the value of derivatives) as a
ratio of GDP. Source: International Monetary Fund and national sources.
GEQGDP Sum of total foreign equity assets and liabilities as a ratio to GDP. Equity is the
sum of FDI and portfolio equity, and FDI is measured at book value. Source: International
Monetary Fund, Balance of Payments Statistics, and national sources.
GEQSHARE Share of foreign equity assets and liabilities in total foreign assets and
liabilities. Equals the ratio of GEQGDP to IFIGDP.
EXTLIB Index of capital account liberalization. Range is (0,4) where 4 denotes complete
liberalization. A value of zero indicates the presence of capital controls, obligation to
surrender export proceeds, multiple exchange rate practices, and current account
restrictions. Source: Grilli and Milesi-Ferretti (1995), updated by Mody and Murshid
(2002).
OPENNESS Ratio of exports plus imports of goods and services to GDP. Source:
International Monetary Fund, Balance of Payments Statistics (Penn World Tables version
6.0 for Belgium).
GDP per Capita Measured in constant US dollars. Source: World Bank’s World
Development Indicators Online Database.
Financial Depth Ratio of liquid liabilities to GDP. Source: Beck, Thorsten, Asli
Demirgüç-Kunt and Ross Levine (1999).
Stock Market Capitalization Ratio of stock market capitalization to GDP. Source:
Datastream, Thomson Financial Inc.
Cumulative Privatization Ratio of cumulative privatization revenues to GDP. Source:
OECD Privatization Database.
Corporate Tax Rate Average tax rate on corporate profits as calculated by Devereux,
Lockwood and Redoano (2002).
Investor Protection Dummy variable taking the value 1 if a country has introduced a law
prohibiting insider trading, and zero otherwise. Source: Bekaert, Harvey and Lundblad
(2001).
Yields on external assets and liabilities: investment income payments/receipts in US
dollars on a specific asset/liability category during year t, divided by the outstanding stock
of the specific asset/liability at the end of year t-1. Source data for investment income
flows and international investment positions: International Monetary Fund, Balance of
Payments Statistics, and national sources.
Capital gains on external assets/liabilities: difference between the change in the stock of
the relevant external asset/liability between the end of year t and the end of year t-1, and
the corresponding capital flow during year t, as a ratio of the stock at end-year t-1. All