Sequencing Capital Account Liberalization: Lessons from the Experiences in Chile, Indonesia, Korea, and Thailand

Johnston, Robert B.; Darbar, Salim M.; Echeverria, Claudia; Dept, Exchange Affairs

doi:10.2139/ssrn.882738

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Cited by 28 publications

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“…Sections 4 and 5 report the empirical analysis; Section 6 concludes. The Appendix details the methodology 6Johnston, Darbar, and Echeverria (1997), Johnston and Tamirisa (1998), World Economic Outlook (1998), and Eichengreen, Mussa and others (1998. used to compute the new measures of capital controls, prudential regulation, supervision, and depositors' safety.…”

Section: Introductionmentioning

confidence: 99%

Financial Fragility and Economic Performance in Developing Economies: Do Capital Controls, Prudential Regulation and Supervision Matter?

Rossi

1999

SSRN Journal

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Section: Introductionmentioning

confidence: 99%

Financial Fragility and Economic Performance in Developing Economies: Do Capital Controls, Prudential Regulation and Supervision Matter?

Rossi

1999

SSRN Journal

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Financing decisions of firms and central bank policy

Goh

Olivier

2004

Journal of International Money and Finance

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Foreign direct investment policy, domestic firms, and financial constraints

Danzman¹

2019

Bus. Polit.

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The past three decades have witnessed a spectacular evolution in policies toward foreign direct investment (FDI). Whose interests do these policy innovations reflect? While existing theory suggests popular pressure drives openness, I argue reforms occur when shifts in financial access change local economic elites’ policy preferences toward FDI. When large domestic firms no longer have access to cheap credit through political connections, liquidity constraints outweigh firms' preferences to exclude foreigners. Economic elites then pressure governments to pursue liberal FDI policy environments. Using a combination of measures of FDI policy for up to 166 countries from 1973–2015, I find increases in financial constraints are robustly associated with decreases in foreign equity restrictions, and this relationship is strongest when domestic political institutions favor business interests. A financing constraints explanation of FDI policy reform has important implications for explanations of policy change, theories of business power amid increased interdependence, and expectations over the distributive effects of globalization.

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Sequencing Capital Account Liberalization: Lessons from the Experiences in Chile, Indonesia, Korea, and Thailand

Cited by 28 publications

References 10 publications

Financial Fragility and Economic Performance in Developing Economies: Do Capital Controls, Prudential Regulation and Supervision Matter?

Financial Fragility and Economic Performance in Developing Economies: Do Capital Controls, Prudential Regulation and Supervision Matter?

Financing decisions of firms and central bank policy

Foreign direct investment policy, domestic firms, and financial constraints

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