Capital Account Liberalization And Employment
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| Author | : Fangfang Hou |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2018 |
| Genre | : |
| ISBN | : |
How does capital account liberalization impact on firm employment? Using a firm level panel data set that covers over 60 countries between 1982 and 2014, we find a statistically significant effect of capital account liberalization on firm employment. The magnitude of the impact is economically significant. The casual effect is identified through a generalized triple differences identification strategy. We also show that there are substantial heterogeneous effects across countries and firms. The effect is more pronounced for firms in industries that depend more on external finance while weaker for firms in countries with stronger employment protection legislation. Financially constrained firms and younger firms respond more positively to liberalization. Overall, our firm-level evidence from around the world adds support to the benefits of globalization.
| Author | : Davide Furceri |
| Publisher | : International Monetary Fund |
| Total Pages | : 26 |
| Release | : 2015-11-24 |
| Genre | : Business & Economics |
| ISBN | : 1513531409 |
This paper examines the distributional impact of capital account liberalization. Using panel data for 149 countries from 1970 to 2010, we find that, on average, capital account liberalization reforms increase inequality and reduce the labor share of income in the short and medium term. We also find that the level of financial development and the occurrence of crises play a key role in shaping the response of inequality to capital account liberalization reforms.
| Author | : Peter Blair Henry |
| Publisher | : |
| Total Pages | : 82 |
| Release | : 2006 |
| Genre | : Capital |
| ISBN | : 9780979037634 |
"Writings on the macroeconomic impact of capital account liberalization find few, if any, robust effects of liberalization on real variables. In contrast to the prevailing wisdom, I argue that the textbook theory of liberalization holds up quite well to a critical reading of this literature. The lion's share of papers that find no effect of liberalization on real variables tell us nothing about the empirical validity of the theory, because they do not really test it. This paper explains why it is that most studies do not really address the theory they set out to test. It also discusses what is necessary to test the theory and examines papers that have done so. Studies that actually test the theory show that liberalization has significant effects on the cost of capital, investment, and economic growth"--National Bureau of Economic Research web site.
| Author | : Christoph Yew |
| Publisher | : GRIN Verlag |
| Total Pages | : 93 |
| Release | : 2010-07-02 |
| Genre | : Business & Economics |
| ISBN | : 3640653564 |
Diploma Thesis from the year 2008 in the subject Business economics - Economic Policy, grade: 2.0, University of Osnabrück (Fachbereich Außenwirtschaft), language: English, abstract: During the recent decades, many countries decided to get access to international financial markets by liberalizing their capital accounts. As we will see in this paper, the issues of liberalization are very complex. Many different areas like, for example, growth, inflation or the labor market are affected by it. For some areas, empirical research supports theory and delivers sustainable and significant results. For others, theory is inconsistent or not supported by evidence from the real world. Some special ones, like for instance welfare or productivity, even show that it is important to split up the results to see whose welfare is increased or which's branch productivity is affected. Another interesting point is the connection between crises and capital account liberalization. Due to the financial crises that occurred in the aftermath of liberalization the concept has been controversially debated by academics for a long time. The real connection between these two issues is not yet clear. The structure of this paper is as follows. Section 2 will give short case studies of countries that liberalized their capital account. Section 3 is meant to endow the reader with some basic tools that will be important for the understanding of the concepts that will be presented later on in this paper. This includes definitions and conceptual ideas about measuring capital account liberalization. Section 4 focuses on the theory and empirical findings. In that section, the effects of liberalization on various macroeconomic variables will be presented. Section 5 follows the thoughts of the prior one by having a look at the implications that can be concluded from the theoretical and empirical findings that have been presented in the prior chapter. Section 6 discusses capital account liberalization with r
| Author | : Age Bakker |
| Publisher | : International Monetary Fund |
| Total Pages | : 72 |
| Release | : 2002-09-26 |
| Genre | : Business & Economics |
| ISBN | : 1589061179 |
After the industrial countries established current account convertibility in the late1950s, they began to phase out their capital controls. Their efforts were slow and tentative at first, but built up considerable momentum by the 1980s as market-oriented economic policies gained popularity. This paper describes how national policymakers’ views of capital controls shifted over time, and how these controls have been closely related to regulation in other policy areas, such as banking and financial markets. As developing countries seek to liberalize their capital accounts to obtain the benefits of increased integration with the global economy, what lessons can be drawn from industrial countries’ diverse experiences with capital controls, and how can a country’s liberalization measures be sequenced to minimize disturbances to its exchange rate and monetary policies?
| Author | : Ester Faia |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2007 |
| Genre | : |
| ISBN | : |
In recent decades, capital account liberalization in emerging economies has often been followed by a surge in capital inflows, despite the presence of severe informational asymmetries for foreign lenders. Empirical studies have shown that in emerging economies financial liberalization has led to an increase in consumption volatility (also relative to output). I use a small open economy model where foreign lending to households is constrained by an endogenous borrowing limit. Borrowing is secured by collateral in the form of durable investment whose accumulation is subject to adjustment costs. This economy is able to replicate the aforementioned stylized fact in response to various shocks (productivity, foreign demand and government expenditure). I find that financial liberalization reduces welfare since it increases the volatility of consumption and employment.
| Author | : Kodjovi M. Eklou |
| Publisher | : International Monetary Fund |
| Total Pages | : 35 |
| Release | : 2023-03-03 |
| Genre | : Business & Economics |
| ISBN | : |
Firms play an important role in shaping income inequality at the aggregated country level, given that wages represent a significant proportion of household income. We investigate the distributional consequences of capital account liberalization, relying on firm level data to explore the implications for betweenfirms earning inequality in ASEAN5 countries over the period 1995-2019. We find that between-firms wage dispersion alone, accounts for a nontrivial proportion of the variation in the market Gini. Our empirical findings show that capital account liberalization increases between-firms wage inequality, as wages grow faster at initially high-paying firms and slow-down at firms at the lower portion of the wage distribution. These results are robust to a battery of robustness checks. Further, the directions and categories of capital account liberalization matter as results are pronounced for inflow liberalization and equity capital flows. We also show that capital account liberalization induces an increase in Profit-to-Wage ratios. Furthermore, the impact depends on country characteristics (wage setting institutions, the level of financial development and the size of the informal sector) as well as industry characteristics (export orientation and external finance dependence).
| Author | : Mr.Giovanni Dell'Ariccia |
| Publisher | : International Monetary Fund |
| Total Pages | : 74 |
| Release | : 1998-09-30 |
| Genre | : Business & Economics |
| ISBN | : 9781557757777 |
Capital account liberalization - orderly, properly sequence, and befitting the individual circumstances of countries- is an inevitable step for all countries wishing to realize the benefits of the globalized economy. This paper reviews the theories behind capital account liberalization and examines the dangers associated with free capital flows. The authors conclude that the dangers can be limited through a combination of sound macroeconomic and prudential policies.
| Author | : Ying Yirong |
| Publisher | : CRC Press |
| Total Pages | : 0 |
| Release | : 2015-05-13 |
| Genre | : Business & Economics |
| ISBN | : 9781498712262 |
Along with the development of economic globalization, many countries have begun to relax their controls on their capital accounts. However, the recent financial crises in Latin American countries as well as the exchange rate crises in Southeast Asian countries have shown that there is major risk associated with capital account liberalization. This book details the benefits and risks of capital account liberalization and explains how to take an open-door policy at the appropriate time in order to reduce the risk to the lowest possible level. Supplying a complete mathematical analysis framework for the study of the problem of capital account liberalization, it presents a few important models that have been developed for the study of capital account liberalization. Next, the book examines the influence of capital account liberalization on the stability of financial markets by greatly expanding the scope of ordinary differential equation theory to the analysis of local stabilities. It conveys cutting-edge results while providing a general yet simple analysis framework, enriched with practical experiences from developing countries. This book applies the theory of limit cycles to the study of problems related to capital account liberalization and discusses the contagion of financial crises among different countries. Many problems related to capital account liberalization are formulated as optimization models, showing the fact that much broader economic issues can be solved by employing optimization methods. The book concludes by comparing the contagion effect of financial markets between nations with a relatively high degree of openness with those characterized by a moderate degree of openness. Explaining how to determine optimal capital inflows and outflows, this book provides you with the understanding required to accurately determine the characteristics, backgrounds, causes, and roles of capital account liberalization and relevant capital flows.
| Author | : Hali J. Edison |
| Publisher | : |
| Total Pages | : 72 |
| Release | : 2002 |
| Genre | : Capital market |
| ISBN | : |
This paper reviews the literature on the effects of capital account liberalization and stock market liberalization on economic growth. The various empirical measures used to gauge the presence of controls on capital account transactions as well as indicators of stock market liberalization are discussed. We compare detailed measures of capital account controls that attempt to capture the intensity of enforcement with others that simply capture whether or not controls are present. Our review of the literature shows the contrasting results that have been obtained. These differences may reflect differences in country coverage, sample periods and indicators of liberalization. In order to reconcile these differences, we present new estimates of the effects on growth of capital account liberalization and stock market liberalization. We find some support for a positive effect of capital account liberalization on growth, especially for developing countries.
