Determinants of capital inflows into Asia: The relevance of contagion effects as push factors

This article investigates the impacts of both external factors and domestic fundamentals on the evolution of capital inflows with a panel of four Asian countries over the 1990-2007 period. The objective is to test contagion variables, as defined by Masson (1999), as push factors in order to complete push factor literature and to secure a more integrated point of view of the determinants of capital inflows. Tests show that both push and pull factors are significant. Push factors as carry trade strategies, global liquidity and contagion factors, seem to be major determinants of capital inflows into Asia.