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Threshold Effects of Capital Account Liberalization on Productivity: Bootstrap Method in Non-dynamic Panels

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Abstract

Based on panel data of 64 countries during 1984–2012, this paper applies multi-threshold model to empirically verify the threshold effects of capital account liberalization on country’s aggregate productivity. Bootstrap test result shows: capital account liberalizations of the countries at different development level have heterogeneous influences on the total factor productivity, namely, “threshold effect” exists; furthermore, financial development and per capita GDP of a country decide the direction and intensity of capital account liberalization influencing the total factor productivity to a large extent; finally, productivity growth effect of capital account liberalization has a non-monotonic relation with the financial development. As far as the developing countries at middle income-level are concerned, after their financial development has reached a certain level, finance liberalization can effectively facilitate the growth of total factor productivity.

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Notes

  1. Such as the financial crisis in Mexico in 1994, the southeast Asian financial crisis in 1997, the Russian financial crisis in 1999, Argentina crisis in 2001, and so on.

  2. Sample data covers the main developed and emerging marketing economies as many as possible in the world and period of intensive implementation of capital account liberalization policies.

  3. It is worth noting that we control the institutional quality for that capital account liberalization will create the positive influence on productivity by facilitating domestic institutional quality and corporate governance [8].

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Acknowledgements

The authors acknowledge National Social Science Foundation of China (Grant: 15ZDC020); the National Natural Science Foundation of China (Grant: 71373187); National Social Science Foundation of China (Grant: 15BJY172).

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Authors and Affiliations

  1. Economics and Management School, Wuhan University, Wuhan, China

    Chun Jiang & Pei Zhang

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  1. Chun Jiang
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  2. Pei Zhang
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Correspondence to Pei Zhang.

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Jiang, C., Zhang, P. Threshold Effects of Capital Account Liberalization on Productivity: Bootstrap Method in Non-dynamic Panels. Wireless Pers Commun 102, 713–723 (2018). https://doi.org/10.1007/s11277-017-5088-0

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  • DOI: https://doi.org/10.1007/s11277-017-5088-0

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