How do capital controls affect international trade?

Dahai Fu and Li Cao

Economics Letters, 2020, vol. 186, issue C

Abstract: Trade effects of capital controls have not been thoroughly examined empirically. Using a new dataset of capital controls on both inflows and outflows, we study the impact of capital controls on international trade by augmenting the gravity model with capital controls. The results consistently show that capital controls are correlated more with exports rather than imports. Inward capital controls reduce exports, while outward capital controls promote exports.

Keywords: Capital controls; International trade; Gravity model (search for similar items in EconPapers)
JEL-codes: F14 F32 F38 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:186:y:2020:i:c:s0165176519303829

DOI: 10.1016/j.econlet.2019.108761

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