Capital controls and foreign direct investment
E Asiedu, D Lien - World development, 2004 - Elsevier
E Asiedu, D Lien
World development, 2004•ElsevierThis paper examines the effect of three types of capital control policies on FDI:(a) the
existence of multiple exchange rates;(b) restrictions on capital account, and (c) restrictions
on the repatriation of export proceeds. We find that the impact of capital controls on FDI
varies by region and has changed over time. In the 1970s and 1980s, none of the policies
had a significant impact on FDI. In the 1990s, all three were significant. Furthermore, capital
controls have no effect on FDI to sub-Saharan Africa and the Middle East, but affects FDI to …
existence of multiple exchange rates;(b) restrictions on capital account, and (c) restrictions
on the repatriation of export proceeds. We find that the impact of capital controls on FDI
varies by region and has changed over time. In the 1970s and 1980s, none of the policies
had a significant impact on FDI. In the 1990s, all three were significant. Furthermore, capital
controls have no effect on FDI to sub-Saharan Africa and the Middle East, but affects FDI to …
This paper examines the effect of three types of capital control policies on FDI: (a) the existence of multiple exchange rates; (b) restrictions on capital account, and (c) restrictions on the repatriation of export proceeds. We find that the impact of capital controls on FDI varies by region and has changed over time. In the 1970s and 1980s, none of the policies had a significant impact on FDI. In the 1990s, all three were significant. Furthermore, capital controls have no effect on FDI to sub-Saharan Africa and the Middle East, but affects FDI to East Asia and Latin America adversely.
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