A Simple Measure of the Intensity of Capital Controls

Edison, Hali J.; Warnock, Francis E.

doi:10.2139/ssrn.281801

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A Simple Measure of the Intensity of Capital Controls

37 Pages Posted: 5 Sep 2001

See all articles by Hali J. Edison

Hali J. Edison

International Monetary Fund (IMF) - Research Department

Francis E. Warnock

University of Virginia - Darden Business School; National Bureau of Economic Research (NBER)

There are 2 versions of this paper

Date Written: September 2001

Abstract

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.

Keywords: emerging markets, international financial liberalization, openness, portfolio investment

JEL Classification: F3, G15

Suggested Citation: Suggested Citation

Edison, Hali J. and Warnock, Francis E., A Simple Measure of the Intensity of Capital Controls (September 2001). Available at SSRN: https://ssrn.com/abstract=281801 or http://dx.doi.org/10.2139/ssrn.281801