The impact of institutional factors and capital market openness on short-term international capital flow

With the development of economic globalization, most of countries began to gradually open up their capital market, and improved relevant institutional environment. At the same time, short-term international capital flows caused much more crisis in emerging economies, which emphasizes the importance of the exploration into its influencing factors. This paper will focus on the study of economic institutional factors, including the interest rate policy, exchange rate policy, property rights institutional change, the degree of economic marketization, and the degree of capital market openness in the view of China, and the degree of capital market openness to figure out how to control short-term international capital flows fundamentally. By empirical analysis with VAR model establishment, impulse response functions and variance decomposition with relevant variables' quarter statistics covering 2000 to 2014, we can conclude that the factors above will influence the short-term international capital flow in each way.