Capital Controls and the Cost of Debt
Abstract
Using a panel data set for international corporate bonds and capital account restrictions in advanced and emerging economies, we show that restrictions on capital inflows produce a substantial and economically meaningful increase in corporate bond spreads, with a one-standard-deviation increase in our capital controls index increasing spreads by up to 35 basis points. The effect of capital controls on inflows differs across firms and across countries; the effect is particularly strong for firms that face more restricted access to alternative sources of external financing. Our findings establish a novel channel through which capital controls affect economic outcomes.
Indexation
Artículo de publicación SCOPUS
Identifier
URI: https://repositorio.uchile.cl/handle/2250/172561
DOI: 10.1057/s41308-019-00080-6
ISSN: 2041417X
20414161
Quote Item
IMF Economic Review, Volumen 67, Issue 2, 2019, Pages 288-314
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