Capital account openness, international trade, and economic growth : A cross-country empirical investigation

Emerging Markets Finance and Trade

Volumn 44, Issue 2, 2008, Pages 15-38

  Butkiewicz, James L ^a   Yanikkaya, Halit ^b  

^a UNIVERSITY OF DELAWARE   (United States)

^b CELAL BAYAR UNIVERSITY   (Turkey)

Author keywords

Capital controls; Capital flows; Economic growth; Financial openness

Indexed keywords

EID: 42449099609     PISSN: 1540496X     EISSN: None     Source Type: Journal    
DOI: 10.2753/REE1540-496X440202     Document Type: Article

References (64)

1. Adelman, I. 2000. "Editor's Introduction." World Development 28, no. 6: 1053-1060.
2. Alfaro, L. 2003. "Foreign Direct Investment and Growth: Does the Sector Matter?" Harvard Business School, Boston.
3. Alfaro, L.; A. Chanda; S. Kalemli-Ozcan; and S. Sayek. 2003. "FDI Spillovers, Financial Markets, and Economic Development." Working Paper, International Monetary Fund, Washington, DC.
4. Balasubramanyam, V.N.; M. Salisu; and D. Sapsford. 1996. "Foreign Direct Investment and Growth in EP and IS Countries." Economic Journal 106, no. 434: 92-105.
5. Barro, R.J. 1997. Determinants of Economic Growth: A Cross-Country Empirical Study. Cambridge, MA: MIT Press.
6. Barro, R.J., and J.-W Lee. 2005. "IMF Programs: Who Is Chosen and What Are the Effects?" Journal of Monetary Economics 52, no. 7: 1245-1269.
7. Bhagwati, J. 1978. Anatomy and Consequences of Exchange Control Regimes. Cambridge: Ballinger.
8. _. 1998. "The Capital Myth: The Difference Between Trade in Widgets and Dollars." Foreign Affairs 77, no. 3: 7-12.
9. Blomstrom, M., and A. Kokko. 1997. "How Foreign Investment Affects Host Countries." World Bank Working Paper Series no. 1745, World Bank, Washington, DC.
10. Blomstrom, M.; R.E. Lipsey; and M. Zejan. 1992. "What Explains Developing Country Growth?" Working Paper Series no. 4132, National Bureau of Economic Research, Cambridge, MA.
11. Borensztein, E.; J. De Gregorio; and J.-W. Lee. 1998. "How Does Foreign Direct Investment Affect Economic Growth?" Journal of International Economics 45, no. 1: 115-135.
12. Brainard, S.L. 1997. "An Empirical Assessment of the Proximity-Concentration Tradeoff Between Multinational Sales and Trade." American Economic Review 87, no. 4: 520-544.
13. Carr, D.; J. Markusen; and K. Maskus. 2001. "Estimating the Knowledge-Driven Model of the Multinational Enterprise." American Economic Review 91, no. 3: 693-708.
14. Chanda, A. 2001. "The Influence of Capital Controls on Long-Run Growth: Where and How Much?" Working Paper, Department of Economics, Louisiana State University, Baton Rouge.
15. De Mello, L.R., Jr. 1997. "Foreign Direct Investment in Developing Countries and Growth: A Selective Survey." Journal of Development Studies 34, no. 1: 1-34.
16. Devereux, M.B., and K.M. Lee. 1999. "Endogenous Trade Policy and the Gains from International Financial Markets." Journal of Monetary Economics 43, no. 1: 35-59.
17. Durham, J.B. 2004. "Absorptive Capacity and the Effects of Foreign Direct Investment and Equity Foreign Portfolio Investment on Economic Growth." European Economic Review 48, no. 2: 285-306.
18. Easterly, W. 1999. "Life During Growth." Journal of Economic Growth 4, no. 3: 239-275.
19. Easterly, W., and R. Levine. 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions." Quarterly Journal of Economics 112, no. 4: 1203-1250.
20. Easterly, W., and H. Yu. "Global Development Network Growth Database." World Bank, Washington, DC (available at www.worldbank.org/ research/growth/GDNdata.htm).
21. Edison, H.J.; M.W. Klein; L. A. Ricci; and S. Torsten. 2004. "Capital Account Liberalization and Economic Performance: Survey and Synthesis." IMF Staff Papers 51, no. 2: 220-256.
22. Edwards, S. 1999. "How Effective Are Capital Controls?" Journal of Economic Perspectives 13, no. 4: 65-84.
23. _. 2001. "Capital Flows and Economic Performance: Are Emerging Economies Different?" Working Paper Series no. 8076, National Bureau of Economic Research, Cambridge, MA.
24. Eichengreen, B. 2001. "Capital Account Liberalization: What Do Cross-Country Studies Tell Us?" World Bank Economic Review 15, no. 3: 341-365.
25. Eicher, T.S., and P. Kalaitzidakis. 1997. "The Human Capital Dimension to Foreign Direct Investment: Training, Adverse Selection, and Firm Location." In Dynamics, Economic Growth, and International Trade, ed. B.S. Jensen and K. Wong, pp. 337-364. Ann Arbor: University of Michigan Press.
26. Ekholm, K.; R. Forslid; and J.R. Markussen. 2003. "Export-Platform Foreign Direct Investment." Working Paper no. 9517, National Bureau of Economic Research, Cambridge, MA.
27. Feeney, J. 1994. "Goods and Asset Market Interdependence in a Risky World." International Economic Review 35, no. 3: 551-563.
28. Fontagne, L. 1999. "Foreign Direct Investment and International Trade: Complements or Substitutes?" OECD Science, Technology and Industry Working Papers 1999/3, Paris, October 14 (available at http://caliban. sourceoecd.org/vl=148343/cl=ll/nw=l/rpsv/ workingpapers/18151965/ wp_51gsjhvj7n0r.htm).
29. Glick, R., and M. Hutchinson. 2000. "Stopping 'Hot Money' or Signaling Bad Policy? Capital Controls and the Onset of Currency Crises." Federal Reserve Bank of San Francisco and University of California, Santa Cruz.
30. Goldberg, L.S., and M.W. Klein. 2001. "International Trade and Factor Mobility: An Empirical Investigation." In Money, Capital Mobility, and Trade: Essays in Honor of Robert A. Mundell, ed. G.A. Calvo, M. Obstfeld, and R. Dornbusch, pp. 273-302. Cambridge, MA: MIT Press.
31. Gorg, H., and D. Greenway. 2004. "Much Ado About Nothing? Do Domestic Firms Really Benefit from Foreign Direct Investment?" World Bank Research Observer 19, no. 2: 171-197.
32. Hanson, G.H.; R.J. Mataloni; and M.J. Slaughter. 2001. "Expansion Strategies of U.S. Multinational Firms." In Brookings Trade Forum, ed. Dani Rodrik and Susan Collins, pp. 245-294. Washington, DC: Brookings Institution Press.
33. International Monetary Fund. Various years. Annual Report on Exchange Arrangements and Exchange Restrictions. Washington, DC.
34. _. Various years. Direction of Trade Statistics Yearbook. Washington, DC.
35. Kaplan, E., and D. Rodrik. 2001. "Did the Malaysian Capital Controls Work?" Working Paper Series no. 8142, National Bureau of Economic Research, Cambridge, MA.
36. Keller, W. 2001. "International Technology Diffusion." Working Paper Series no. 8573, National Bureau of Economic Research, Cambridge, MA.
37. King, R.G., and R. Levine. 1993. "Finance and Growth: Schumpeter Might Be Right." Quarterly Journal of Economics 108, no. 3: 717-737.
38. Klein, M., and G. Olivei. 1999. "Capital Account Liberalization, Financial Depth, and Economic Growth." Working Paper Series no. 7384, National Bureau of Economic Research, Cambridge, MA.
39. Kose, M.A.; E.S. Prasad; and M.E. Terrones. 2004. "How Do Trade and Financial Integration Affect the Relationship Between Growth and Volatility?" Working Paper, Federal Reserve Bank, San Francisco, CA.
40. Leblang, D.A. 1997. "Domestic and Systematic Determinants of Capital Controls in the Developed and Developing World." International Studies Quarterly 41, no. 3: 435-454.
41. Levine, R. 1997. "Financial Development and Economic Growth: Views and Agenda." Journal of Economic Literature 35, no. 2: 688-726.
42. Levine, R., and S. Zervos. 1996. "Stock Market Development and Long-Run Growth." World Bank Economic Review 10, no. 2: 323-339.
43. _. 1998. "Stock Markets, Banks, and Economic Growth." American Economic Review 88, no. 3: 537-558.
44. Lipsey, R.E. 2002. "Home and Host Country Effects of FDI." Working Paper no. 9293, National Bureau of Economic Research, Cambridge, MA.
45. Markusen, J.R. 2002. Multinational Firms and the Theory of International Trade. Cambridge, MA: MIT Press.
46. Markusen, J.R., and K.E. Maskus. 2001. "Multinational Firms: Reconciling Theory and Evidence." In Topics in Empirical International Economics: A Festschrift in Honor of Robert E. Lipsey, ed. Magnus Blomstrom and Linda Goldberg, pp. 71-98. Chicago: University of Chicago Press.
47. _. 2002. "Discriminating Among Alternative Theories of the Multinational Enterprise." Review of International Economics 10, no. 4: 694-707.
48. Nuxoll, D.A. 1994. "Differences in Relative Prices and International Differences in Growth Rates." American Economic Review 84, no. 5: 1423-1436.
49. Olofsdotter, K. 1998. "Foreign Direct Investment, Country Capabilities and Economic Growth." Weltwirtschaftliches Archiv 134, no. 3: 534-547.
50. Organization for Economic Cooperation and Development (OECD). 1995. Foreign Direct Investment, Trade, and Employment. Paris.
51. Pritchett, L. 2001. "Where Has All the Education Gone?" World Bank Economic Review 15, no. 3:367-391.
52. Quinn, D.P. 1997. "The Correlates of Changes in International Financial Regulation." American Political Science Review 91, no. 3: 531-551.
53. Rodrik, D. 1998. "Who Needs Capital-Account Convertibility?" Essays in International Finance no. 207, International Finance Section, Department of Economics, Princeton University, Princeton, NJ.
54. Rodrik, D., and A. Velasco. 2000. "Short-Term Capital Flows." In Annual World Bank Conference on Development Economics 1999, ed. B. Pleskovic and J. Stiglitz, pp. 59-90. Washington, DC: World Bank.
55. Stiglitz, J.E. 2000. "Capital Market Liberalization, Economic Growth, and Instability." World Development 28, no. 6: 1075-1086.
56. Stock, J.H., and M.W. Watson. 2003. Introduction to Econometrics. New York: Pearson Education.
57. Summers, R., and A. Heston. 1991. "The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950-1988." Quarterly Journal of Economics 106, no. 2: 327-368.
58. _. 1994. The Penn World Tables (Mark 5.6): An Expanded Set of International Comparisons, 1950-1992. Cambridge, MA: National Bureau of Economic Research.
59. Tamirisa, N.T. 1999. "Exchange and Capital Controls as Barriers to Trade." IMF Staff Papers 46, no. 1:69-88.
60. Temple, J. 1999. "The New Growth Evidence." Journal of Economic Literature 37, no. 1: 112-156.
61. United Nations Conference on Trade and Development (UNCTAD). 1997. World Investment Report: Transnational Corporations, Market Structure and Competition Policy. New York and Geneva.
62. United Nations Industrial Development Organization (UNIDO). 1996. The Globalization of Industry: Implications for Developing Countries Beyond 2000. Vienna: UNIDO.
63. Wang, J.-Y. 1990. "Growth, Technology Transfer, and the Long-Run Theory of International Capital Movements." Journal of International Economics 29, nos. 3-4: 255-271.
64. World Bank. 1999. World Development Indicators. Washington, DC (available at http://web.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/0,, contentMDK:21298138∼ pagePK:64133150∼piPK:64133175∼theSitePK:239419, 00.html).