scholarly journals Capital Account Liberalization, the Cost of Capital, and Economic Growth

2003 ◽  
Author(s):  
Peter Blair Henry
Keyword(s):  
Economic Growth ◽  
Cost Of Capital ◽  
Capital Account ◽  
Capital Account Liberalization ◽  
The Cost

scholarly journals Capital Account Liberalization: Theory, Evidence, and Speculation

2007 ◽  
Vol 45 (4) ◽  
pp. 887-935 ◽  
Author(s):  
Peter Blair Henry
Keyword(s):  
Economic Growth ◽  
Capital Investment ◽  
Cost Of Capital ◽  
Capital Account ◽  
Critical Reading ◽  
Capital Account Liberalization ◽  
Empirical Validity ◽  
Macroeconomic Impact ◽  
The Cost

Research on the macroeconomic impact of capital account liberalization finds few, if any, robust effects of liberalization on real variables. In contrast to the prevailing wisdom, I argue that the textbook theory of liberalization holds up quite well to a critical reading of this literature. Most papers that find no effect of liberalization on real variables tell us nothing about the empirical validity of the theory because they do not really test it. This paper explains why it is that most studies do not really address the theory they set out to test. It also discusses what is necessary to test the theory and examines papers that have done so. Studies that actually test the theory show that liberalization has significant effects on the cost of capital, investment, and economic growth.

scholarly journals Impact of Corporate Governance on the Cost of Capital: Empirical Evidence from the Non-Financial Sector of Pakistan

2021 ◽  
Vol 7 (2) ◽  
pp. 477-489
Author(s):  
Muhammad Bilal Ijaz ◽  
Muhammad Naveed ◽  
Hassan Raza
Keyword(s):  
Economic Growth ◽  
Corporate Governance ◽  
Cost Of Capital ◽  
Financial Sector ◽  
Political Connections ◽  
Board Independence ◽  
Data Set ◽  
Ceo Duality ◽  
Board Committees ◽  
The Cost

Purpose: The study looked at the effect of corporate governance on the cost of capital of firms in Pakistan's non-financial sector. Design/Methodology/Approach: The study sample is comprised of balanced data set of 175 non-financial companies listed on the Pakistan Stock Exchange between 2008 and 2018. The study used the dynamic panel GMM estimator technique. Findings: The findings revealed that an increase in the number of directors, board independence, CEO duality, and inflation negatively influence the cost of capital. On the other hand, the increase in institutional holdings increased the cost of capital. In addition, it is discovered that board committees, political connections, and economic growth do not affect the cost of capital Implications/Originality/Value:  When board size, CEO duality, board independence, and inflation increased, the cost of capital decreased in Pakistan's non-financial sector. Furthermore, board committees, political connections, company leverage, and economic growth do not affect the cost of capital in Pakistan's non-financial sector. In comparison, an increase in institutional shareholding increased the cost of capital in Pakistan's non-financial sector.

Capital Account Liberalization Institutions and Economic Growth in the Emerging World

2021 ◽  
Vol 7 (3) ◽  
pp. 749-756
Author(s):  
Muhammad Atiq-Ur- Rehman ◽  
Furrukh Bashir ◽  
Salyha Zulfiqar Ali Shah ◽  
Muhammad Azhar Bhatti
Keyword(s):  
Economic Growth ◽  
Financial Liberalization ◽  
Emerging Market ◽  
Output Growth ◽  
Capital Account ◽  
Capital Account Liberalization ◽  
Policy Makers ◽  
Institutional Variables ◽  
Institutional Infrastructure ◽  
The Impact

Purpose: The relationship between capital account liberalization and economic growth has been a fervently discussed subject among economists and policy-makers. The role of institutions is imperious to comprehensively investigate the impact of financial openness on growth. The objective of the study is to inspect the nexus between financial liberalization and economic growth after incorporating the contribution of institutional quality. Methodology: A panel of data on 17 emerging market economies (EMEs) is used for the period 1995-2019. We employ the GMM technique by using different de facto and de jure measures of financial liberalization along with institutional variables. Findings: The empirical results illustrate that better quality institutions strengthen the connection between capital account liberalization and output growth in the emerging World. Implications: The policymakers should focus on the more beneficial nature of financial liberalization such as FDI. Also, the policy should be aiming at availing the services of efficient human resources with proper institutional infrastructure.

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