How Effective Are Capital Controls in Asia?

Maria Socorro Gochoco-Bautista, Juthathip Jongwanich and Jong-Wha Lee

Asian Economic Papers, 2012, vol. 11, issue 2, 122-143

Abstract: This study examines the effects of capital account restrictions on capital flows in nine emerging Asian economies using panel regressions with 75 economies and fixed effects over the period 1995–2007. The results show that effectiveness of capital controls in the nine emerging Asian economies varies by asset type and by direction of flow and may differ from that in the rest of the world. For example, unlike in the rest of the world, the use of controls on capital outflows in emerging Asia actually increases the amount of these outflows. This finding suggests that it may be best for emerging market economies in Asia to liberalize rather than constrain capital outflows if they want to prevent such outflows. © 2012 The Earth Institute at Columbia University and the Massachusetts Institute of Technology.

Keywords: capital flows; de jure capital controls; effectiveness; Asia (search for similar items in EconPapers)
JEL-codes: F21 F32 F36 F41 G15 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (13)

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