Capital controls and foreign direct investment
Issue Date
2004-03Author
Asiedu, Elizabeth
Lien, Donald
Publisher
PERGAMON-ELSEVIER SCIENCE LTD
Format
58533 bytes
Type
Article
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Show full item recordAbstract
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. (C) 2003 Elsevier Ltd. All rights reserved.
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Citation
Asiedu, E; Lien, D. Capital controls and foreign direct investment. WORLD DEVELOPMENT. March 2004. 32(3):479-490.
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