Net Exports and Capital Flows

Net Exports are the difference between exports and imports. If the net exports are greater than zero, then there is larger Capital Inflow. However, if the net exports are less than zero, then there is greater capital outflow. If the net exports are zero, there is equal amount of capital inflow and outflow. Thus, International Capital Flows are affected by change in the imports and exports of a country.
Increase in the net exports results in greater capital inflow to the country but lower capital outflow. On the other hand, decrease in the net exports results in lower amount of capital inflow but higher amount of capital outflow.