Skip Navigation



RFS Advance Access published online on May 7, 2008
Review of Financial Studies, doi:10.1093/rfs/hhn034
This Article
Right arrow Full Text
Right arrow Advance Access manuscript (PDF)
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Similar articles in this journal
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Quinn, D. P.
Right arrow Articles by Toyoda, A. M.
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

© The Author 2008. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org

Does Capital Account Liberalization Lead to Growth?

Dennis P. Quinn
McDonough School of Business, Georgetown University

A. Maria Toyoda
Villanova University

Address correspondence to Dennis P. Quinn, McDonough School of Business, Georgetown University, Washington DC 20057; telephone: +202-687-1027; fax: +202-687-4031; e-mail: quinnd{at}georgetown.edu

JEL Classification: F02, F43, P16


  Abstract

We test whether capital account liberalization led to higher economic growth using de jure measures of capital account and financial current account openness for 94 nations, from 1950 (or independence) onward. We argue that measurement error, differing time periods used, and collinearity among independent variables account for conflicting results in prior scholarship. We use pooled time-series, cross-sectional OLS and system GMM estimators to examine economic growth rates, 1955–2004. Capital account liberalization had a positive association with growth in both developed and emerging market nations. We confirm that equity market liberalization has an independent effect on economic growth.

A related version of the paper was presented at the 2001 American Political Science Association meeting. The paper was also presented at seminars at the International Monetary Fund, the McDonough School of Business at Georgetown University, the Wharton School at the University of Pennsylvania, and Trinity College, Dublin. Carla Inclan was a coauthor on the 2001 APSA paper, and we miss her participation in the project. We thank Cam Harvey, an anonymous referee, Philip Lane, Thomas Plumper, John Freeman, Lawrence Broz, Areedam Chanda, Ron Davies, Barry Eichengreen, Michael Klein, David Leblang, Brian Roberts, Frank Warnock, Tom Willet, Bennet Zelner, Stan Nollen, Pietra Rivoli, and Jeromin Zettlemeyer for comments and suggestions. Able research and editorial assistance was provided by Laura McCall, Naphat Kijsamrej, Eric Stemer, Sarah Zhu, and Alberto Ciganda. Alberto and Sarah provided indispensable data management work. The funding has been provided by the Georgetown University McDonough School of Business, the Graduate School of Arts and Science at Georgetown University, and the National Science Foundation (SBR-9729766, SBR-9810410).


Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?




Disclaimer:
Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department.