Capital Account Openness, International Trade, and Economic Growth: A Cross-Country Empirical Investigation
AbstractNew empirical estimates of the effects of capital restrictions on growth support capital account liberalization, especially for developed countries. Capital restrictions reduce the benefits of foreign direct investment (FDI) on growth in developing countries. Estimation results for long-term capital flows demonstrate that countries with higher flows grow faster, challenging the belief that countries must attain a threshold level of development or human capital to benefit from capital inflows. Moreover, findings show that trade with developed countries and FDI inflows are substitutes in developing countries. Overall, the results support capital account liberalization in developed and developing countries.
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Bibliographic InfoArticle provided by M.E. Sharpe, Inc. in its journal Emerging Markets Finance and Trade.
Volume (Year): 44 (2008)
Issue (Month): 2 (March)
Contact details of provider:
Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=111024
capital controls; capital flows; economic growth; financial openness;
Other versions of this item:
- James L. Butkiewicz & Halit Yanikkaya, 2003. "Capital Account Openness, International Trade, and Economic Growth: A Cross-Country Empirical Investigation," Working Papers 03-06, University of Delaware, Department of Economics.
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O50 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - General
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