6 Rule 144A5 in the US) may have also facilitated access to international markets, particularly for portfolio flows (see fttrther IMF (1992), Calvo et al. (1993) and World Bank (1992)). These global factors take on an increased importance given that the recent capital flows have gone to developing countries with a wide spectrum of domestic policies and economic developments.

The inportant (policy) question now is to what extent the capital inflows are a function of country-specific factors and to what extent of factors in industrial countries: i.e, has the recent decline in (US) interest rates been an important "push" factor or have the improved economic prospects in many develcping -ountries been "pulling" flows tc these countries?

# **III.** Data

Data Sources The study uses monthly US capital flow data or gross and net purchases of non-US long-term securities from 9 Latin American countries and 9 Asian counltries for the period January 1988 through September 1992.6 The data was obtained from the US Treasury Department and is part of the Treasury's International Capital Rep,rts (TIC).<sup>7</sup> TIC data is 5Rule 144A, which was introduced in April 1990, has facilitated private pla^ements in the US market by circumventing onerous filing requirements and easing restrictions on resale of privately placed securities.

6The Latin America countries are Argentina, Brazil, Chile, Colombia, Ecuador, Jamaica, Mexico, Uruguay, and Venezuela. The Asian countries in the sample are China, India, Indonesia, Korea, Malaysia, Pakistan, Philippi e-s, Taiwan (China) and Thailand. Our data also covered three more Latin American countries (Panama, Peru and Trinidad and Tobago), but these countries were dropped because the flows either reflected the special banking status or the country (Panama) or were insignificant (Peru, and Trinidad and Tobago). In Asia, we dropped Hcig-Kong from our sample because of the country's status as a international financial center. The results for a smaller group of countries (six Latin American and seven Asian) are also reported.

7We would like to thank Mr. Gary Lee of the US Treasury for his cooperation in providing the data. Quarterly data are published in Treasury Bulletin, Capital Movements section, Table CM-V-4, Foreign Purchases and Sales of Long-Term Securities, by Type and Country. The data cover transactions executed in the US for the accounts of foreigners, and transactions abroad for the accounts of ieporting institutions by their domestic customers. The data includes new issues as well as transactions in outstanding issues. The data are collected by the Treasury from financial intermediaries (banks, brokers and other entities) in the US through so-called International Capital Form S reports. The data do not cover any direct dealings of US (institutional or individual) investors with foreign intermediaries (or direct borrowers or lenders) as these bypass the reporting system. This is probably more of a problem for industrial countries as for these countries institutional investors in the US may be willing to deal directly with the foreign entity, something which seems less likely in case of the less known (corporations in) developing countries. The data on bonds cover the purchase and sales of foreign securities in the US from and to the developing country. The data may thus include