A Simple Measure of the Intensity of Capital Controls

November 1, 2001

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Format: Chicago

Francis E. Warnock, and Hali J Edison. A Simple Measure of the Intensity of Capital Controls, (USA: International Monetary Fund, 2001) accessed December 23, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

We present a readily available monthly measure of the intensity of capital controls across 29 emerging market countries that is based on the degree of restrictions on foreign ownership of equities. The initial opening of a market as given by our measure corresponds well with the liberalization dates of Bekaert and Harvey (2000a). In addition, our measure provides information on the extent of the initial opening as well as the evolution of the liberalization over time. After presenting the measure, we compare it to other existing measures of capital controls and briefly describe empirical applications concerning home bias, capital flows to emerging markets, and the effects of financial liberalization on the cost of capital.

Subject: Balance of payments, Capital controls, Emerging and frontier financial markets, Financial institutions, Financial markets, Market capitalization, Stock markets, Stocks

Keywords: Africa, Asia and Pacific, Capital control, Capital controls, Eastern Europe, Emerging and frontier financial markets, Emerging markets, Global, IFC index, IFC indices, IFCI index, International financial liberalization, Investable index, Liberalization date, Market capitalization, Openness, Portfolio investment, Stock markets, Stocks, WP

Publication Details

Pages:

33
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2001/180
Stock No:

WPIEA1802001
ISBN:

9781451859119
ISSN:

1018-5941

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