Capital goods and capital flows
By: Laura Alfaro, Eliza Hammel
Edition: Rev.
Series: Working paper / Division of Research, Harvard Business School -- 05-055; Working paper (Harvard Business School. Division of Research) -- 05-055
Publisher: Division of Research, Harvard Business School
Published: 2005
Place of publication: Boston
Language: eng
Number of pages: 36
Description: We examine one of the channels through which financial integration can help promote growth. In particular, we study the effects of capital account liberalization on the imports of capital goods. We pay particular attention to the effects of equity market liberalization. We find that for the period 1980-1997, after controlling for trade liberalization and other macroeconomic reforms and policies, stock market liberalization leads to a substantial increase in the share of imports of capital goods. Our results suggest that with the increased access to international capital firms noticeably increase their spending on imports of machinery and equipment. Thus, this paper provides evidence that access to international capital allows countries to enjoy the benefits embodied in international capital goods.
Notes: "Rev. 01/06."

"December 2005"--Added t.p.

"Capital flows and capital goods[sic]"--Added t.p.

Includes bibliographical references.