Found 2 article(s) for author 'Capital Controls'

The Real Effects of Capital Controls: Firm-Level Evidence from a Policy Experiment

The Real Effects of Capital Controls: Firm-Level Evidence from a Policy Experiment.┬áLaura Alfaro, June 2017, Paper, “This paper evaluates the effects of capital controls on firm-level stock returns and real investment using data from Brazil. On average, there is a statistically significant drop in cumulative abnormal returns consistent with an increase in the cost of capital for Brazilian firms following capital control announcements. Large firms and the largest exporting firms appear less negatively affected compared to external-finance-dependent firms, and capital controls on equity inflows have a more negative announcement effect on equity returns than those on debt inflows. Overall, the findings have implications for macro-finance models that abstract from heterogeneity at the firm level to examine the optimality of capital control taxation.Link

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The Real Effects of Capital Controls: Liquidity Constraints, Exporters, and Firm Investment

The Real Effects of Capital Controls: Liquidity Constraints, Exporters, and Firm Investment. Laura Alfaro, May 2014, Paper. “This paper evaluates the effects of capital controls on firm-level stock returns and real investment using data from Brazil. Theory suggests that the imposition of capital controls can drive up the cost of capital and curb investment. Credit constraints are also more likely to bind for firms that are more dependent on external finance. The data suggest that there is a significant decline in cumulative abnormal returns for Brazilian firms following the imposition of capital controls in 2008-2009 consistent with…” Link verified August 21, 2014

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