Abstract: Since the 1990s, financial markets have gradually opened up. Capital account liberalization not only brings foreign liquidity to emerging markets, but also exacerbates the fluctuation of asset prices and exchange rates in emerging markets. Based on the framework of non-linear analysis, this paper explores the cross-border capital flow effects of capital account opening in 52 countries and regions around the world, and examines the gradual evolution of the relationship between them in light of the level of financial development, and compares the differences between the cross-border capital flow effects of capital account opening in emerging markets and developed economies. It is found that capital account openness has a positive effect on foreign direct investment and foreign securities investment, and this effect will increase with the level of financial development, showing a non-linear feature;when financial development is at a low level, capital account openness will reduce the scale of foreign direct investment and domestic securities investment;when the level of financial development is high, capital account liberalization will promote the scale of foreign direct investment and domestic securities investment;compared with developed economies, the non-linear relationship between cross-border capital flow and capital account liberalization in emerging markets is faster, that is, capital account liberalization is affected by the change of financial development level,the dynamic effect of cross-border capital flow on emerging market countries is more significant.

Key words: capital account opening, cross-border capital flow, financial development, PSTR model