# Paradox of international capital flows

- Canonical URL: https://www.gerhardmerk.de/paradox-of-international-capital-flows
- Post ID: 588992
- Modified: 2023-07-25T21:13:44+00:00
- Language: en

## Definition

The fact that investment-seeking capital tends to flow from poor countries to rich ones rather than vice versa. - The reason for this empirical finding is that, although investors could mathematically earn a higher profit in capital-poor economies, they have less confidence in the infrastructure, such as, above all, a poorly educated and poorly healthy labor force, corruption, a fragile legal system, political instability, restrictions on capital movements or the risk of expropriation. - See flight money, money home, money, moral, haven, safe, institution, capital movements, international, capital market opening, capital protection, Lucas paradox. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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