 Capital controls in emerging East Asia: How do they affect investment flows?Journal of Asian Economics, 2019, vol. 62, issue C, 17-38 Abstract: This study examines the effects of capital controls on investment flows using data for ten emerging East Asian economies for the period 2000–2015. Both inflows and outflows are considered and four asset classes are distinguished – direct investment, equity investment, debt security investment, and other investment (mainly loans and deposits). The results suggest that capital controls have limited effectiveness in reducing the flows to which they are directly applied. Restrictions on capital inflows are generally more effective than those on outflows. However, effects extend beyond the investment flows directly targeted by the controls. Restrictions on flows in one direction can affect flows in the opposite direction; restrictions on one asset class can affect flows of other asset classes; and restrictions applied elsewhere in the East Asia region can affect flows for particular economies within the region. Domestic macroeconomic fundamentals are also key determinants of capital flows. Keywords: Capital flow; Capital restrictions; Emerging Asia (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:62:y:2019:i:c:p:17-38 DOI: 10.1016/j.asieco.2019.04.001 Access Statistics for this article Journal of Asian Economics is currently edited by C. Wiemer More articles in Journal of Asian Economics from Elsevier |
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