TY  - JOUR
AU  - Henry,Peter Blair
TI  - Capital Account Liberalization, The Cost of Capital, and Economic Growth
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9488
PY  - 2003
Y2  - February 2003
UR  - http://www.nber.org/papers/w9488
L1  - http://www.nber.org/papers/w9488.pdf
N1  - Author contact info:
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  - Three things happen when emerging economies open their stock markets to foreign investors. First, the aggregate dividend yield falls by 240 basis points. Second, the growth rate of the capital stock increases by an average of 1.1 percentage points per year. Third, the growth rate of output per worker rises by 2.3 percentage points per year. Since the cost of capital falls, investment booms, and the growth rate of output per worker increases when countries liberalize the stock market, the increasingly popular view that capital account liberalization brings no real benefits seems untenable.
ER  -