NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Capital Account Liberalization: Allocative Efficiency or Animal Spirits?

Anusha Chari, Peter Blair Henry

NBER Working Paper No. 8908
Issued in April 2002
NBER Program(s):   CF   IFM

In the year that capital-poor countries open their stock markets to foreign investors, the growth rate of their typical firm's capital stock exceeds its pre-liberalization mean by 4.1 percentage points. In each of the next three years the average growth rate of the capital stock for the 369 firms in the sample exceeds its pre-liberalization mean by 6.1 percentage points. However, there is no evidence that differences in the liberalization-induced changes in the cost of capital or investment opportunities drive the cross-sectional variation in the post-liberalization investment increases.

download in pdf format
   (242 K)

email paper

This paper is available as PDF (242 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w8908

Users who downloaded this paper also downloaded these:
Barsky and Sims w15049 Information, Animal Spirits, and the Meaning of Innovations in Consumer Confidence
Henry w12698 Capital Account Liberalization: Theory, Evidence, and Speculation
Henry w9488 Capital Account Liberalization, The Cost of Capital, and Economic Growth
Arteta, Eichengreen, and Wyplosz w8414 When Does Capital Account Liberalization Help More than It Hurts?
Klein w11112 Capital Account Liberalization, Institutional Quality and Economic Growth: Theory and Evidence
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us