Round-tripping capital definition
Round-tripping capital means that capital is originally from a country (usually a developing country), and is routed to another country before re-entering the original country as foreign direct investments (FDI) inflows. In some developing countries (e.g., China), round-tripping capital is a popular phenomenon. For example, Prasad and Wei (2005) estimate that round-tripping capital represents as much as one-third of Chinese FDI. Round-tripping capital is also often associated with tax evasion (Fisman and Wei, 2004).