TY  - JOUR
AU  - Chari,Anusha
AU  - Henry,Peter Blair
TI  - Capital Account Liberalization: Allocative Efficiency or Animal Spirits?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8908
PY  - 2002
Y2  - April 2002
UR  - http://www.nber.org/papers/w8908
L1  - http://www.nber.org/papers/w8908.pdf
N1  - Author contact info:
Anusha Chari
301 Gardner Hall
CB#3305, Department of Economics
University of North Carolina at Chapel Hill
Chapel Hill, NC 27599
Tel: 919/966-5346
E-Mail: achari@unc.edu

Peter Blair Henry
Stern School of Business
New York University
44 West 4th Street, 11-58
New York, NY 10012
Tel: 212/998-0909
E-Mail: pbhenry@stern.nyu.edu
AB  - 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.
ER  -