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Publications
Publications
  • May 2007
  • Article
  • Journal of International Economics

Capital Flows and Capital Goods

By: Laura Alfaro and Eliza Hammel
  • Format:Print
  • | Pages:23
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Abstract

Studying the relation between equity market liberalization and imports of capital goods, we examine one channel through which international financial integration can promote growth. For the period 1980–1997, we find that after controlling for other policies and fundamentals, stock market liberalizations are associated with a significant increase in the share of imports of machinery and equipment. We hypothesize this can be attributed to the consequences of financial integration, which allows access to foreign capital, and provide evidence consistent with this channel. Our results suggest that increased access to international capital allows countries to enjoy the benefits embodied in capital goods.

Keywords

Cash Flow; Equity; Financial Markets; Economy; Distribution Channels; Machinery and Machining; Capital

Citation

Alfaro, Laura, and Eliza Hammel. "Capital Flows and Capital Goods." Journal of International Economics 72, no. 1 (May 2007): 128–150. (Link to working paper version.)
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About The Author

Laura Alfaro

General Management
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More from the Authors
  • Distributional Consequences of Monetary Policy Across Races: Evidence from the U.S. Credit Register By: Laura Alfaro, Ester Faia and Camelia Minoiu
  • El Salvador: Launching Bitcoin as Legal Tender By: Laura Alfaro, Carla Larangeira and Ruth Costas
  • Can Evidence-Based Information Shift Preferences Towards Trade Policy? By: Laura Alfaro, Maggie X. Chen and Davin Chor
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