Multinational firms circumvent capital controls by distorting their reported trade patterns, profitability, and dividend repatriations. The changed patterns of reported profits in response to capital controls are comparable to the effects of a 24% difference in corporate tax rates. The costliness of these acts of evasion combined with the significantly higher interest rates faced by multination...

this study examins effects of trade liberalization on the wage inequality between urban and rural labor by utilizing the data of micro-level households’ income and expenditures surveys and trade statistics over 2001-2011. the analysis is carried based on the heckscher–ohlin’s theory in international trade and baker’s taste discrimination theory at firms. we use quantile regression and ordinary ...

Capital controls can take many different forms and are broadly defined as any restrictions on the movement of capital across a country’s borders. This article focuses on the debate on the merits of capital controls for emerging markets and developing economies. It describes the potential costs and benefits of capital controls, focusing on the recent empirical literature evaluating the impact of...

Mexico, in its quest for economic growth, moved from an import substituting inward-oriented policy regime towards an outward oriented trade regime since the introduction of the economic reform in 1985. In the form of stocktaking, this study examines the impact of trade liberalization (openness) on long run economic growth in Mexico by using data from 1980:q1 to 2008:q4 with the help of cointegr...

It is widely argued that countries can reap large gains from liberalizing their capital accounts if financial globalization is accompanied by the development of domestic institutions and financial markets. However, if liberalization does not lead to speedier financial development, globalization can result in adverse effects on distribution and welfare within and across countries. We use a multi...

We develop a general equilibrium model with financial frictions in which equity and credit have different rates of return. Financial development raises the loan rate but has a non-monotonic effect on the equity return. We then show in a two-country model that capital account liberalization leads to outflow of financial capital from the country with less developed financial system. However, the ...

Available online 23 July 2010 We investigate the effectiveness of capital controls in insulating economies from currency crises, focusing in particular on both direct and indirect effects of capital controls and how these relationships may have changed over time in response to global financial liberalization and the greater mobility of international capital. We predict the likelihood of currenc...

The Indian industrial policy made a major transition towards liberalization in the mid-1980s with the proponents of liberalization expecting not only a general increase in the efficiency of Indian industry but also improvement terms of innovative performance. Extensive industrial studies, as well as macro level data, suggest that liberalization in the field of industrial licensing and foreign t...

North-South Trade Liberalization and Returns to Skill in the South: The Case of Mexico This study examines the effect of NAFTA, an instance of North-South trade liberalization, on returns to skill in Mexico. Mexico is abundant in low-skill workers relative to the US and Canada, and so, by the Hecksher-Ohlin-Samuelson trade model, NAFTA ought to have raised the relative earnings of low-skill wor...

Traditionally, the impacts of the rights of fi nancial institutions and workers on corporate performance have been analyzed independently. Yet, theory clearly indicates that the combination of relative powers of different stakeholders affects a fi rm overall performance. Using U.S. state level and state-industry level data, we investigate how output growth is affected by bank branch deregulatio...