The real effects of capital controls
Subtitle: financial constraints, exporters, and firm investment
By: Laura Alfaro, Anusha Chari, Fabio Kanczuk
Contributors: Chari, Anusha, author; Kanczuk, Fabio, author; Harvard Business School
Series: Working paper / Harvard Business School -- 15-016; Working paper (Harvard Business School) -- 15-016
Publisher: Harvard Business School
Published: 2014
Place of publication: Boston]
Language: eng
Number of pages: 37
Description: In the aftermath of the global financial crisis of 2008-2009, emerging-market governments have increasingly restricted foreign capital inflows. The data show a statistically significant drop in cumulative abnormal returns for Brazilian firms following capital control announcements. Large firms and the largest exporting firms appear less negatively affected compared to external-finance-dependent firms, and capital controls on equity have a more negative announcement effect than those on debt. Real investment falls following the controls. Overall, the results suggest that capital controls segment international financial markets, increase the cost of capital, reduce the availability of external finance, and lower firm-level investment.
Notes: "September 2014. (Revised November 2014.)" -- Publisher's website.

Includes bibliographical references (pages 25-28).