Capital Controls and Firm Performance

Eugenia Andreasen (), Sofia Bauducco and Evangelina Dardati

Working Papers Central Bank of Chile from Central Bank of Chile

Abstract: This paper studies the effects of capital controls on firms' production, investment and exporting decisions. We empirically characterize the firm's responses to the introduction of a capital control, using the Chilean encaje implemented between 1991 and 1998 as a laboratory. Motivated by our findings, we build a general equilibrium model with heterogeneous firms, financial constraints and international trade and calibrate it to the Chilean economy. We find that capital controls re- duce aggregate production and investment while increasing exports, the share of exporters and TFP. The effects of capital controls are exacerbated for firms in more capital-intensive sectors and for exporters.

Date: 2019-10
New Economics Papers: this item is included in nep-dge, nep-fdg and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
https://www.bcentral.cl/documents/33528/133326/DTBC_852.pdf (application/pdf)

Related works:
Journal Article: Capital controls and firm performance (2024)
Working Paper: Capital Controls and Firm Performance (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:chb:bcchwp:852

Access Statistics for this paper

More papers in Working Papers Central Bank of Chile from Central Bank of Chile Contact information at EDIRC.
Bibliographic data for series maintained by Alvaro Castillo ().