IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v100y2026ics1544612326005349.html

Dynamic effects of financial openness and capital account controls on economic growth

Author

Listed:
  • Liu, Xiaohua
  • Zhang, Bianling
  • Zhao, Caoyuan
  • Li, Yusheng

Abstract

The relationship between financial openness, capital account controls, and economic growth (EG) has become a key topic of debate among policymakers and economists, particularly in emerging economies. This study explores the dynamic relationship among financial openness, capital account controls, and EG using provincial panel data from 2009 to 2023. The study yields the following findings: financial opening has a positive impact on EG, capital account controls restrain EG, capital account controls mediate the relationship between financial opening and EG, and the impact of financial opening on EG varies across provinces with different population densities. Drawing on these findings, this study proposes differentiated policy recommendations, emphasizing the need to adjust the intensity of financial openness and capital account controls according to local conditions to promote sustainable EG. This study contributes to the existing literature by providing novel empirical evidence on the mediating role of capital account controls and the moderating effect of population density, offering a more nuanced understanding of the heterogeneous effects of financial openness on economic growth across regions.

Suggested Citation

  • Liu, Xiaohua & Zhang, Bianling & Zhao, Caoyuan & Li, Yusheng, 2026. "Dynamic effects of financial openness and capital account controls on economic growth," Finance Research Letters, Elsevier, vol. 100(C).
    • Handle: RePEc:eee:finlet:v:100:y:2026:i:c:s1544612326005349
    DOI: 10.1016/j.frl.2026.110005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612326005349
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2026.110005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:100:y:2026:i:c:s1544612326005349. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.