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calendar_month Publicación: 21/09/2016

Capital Account Liberalization and Aggregate Productivity: The Role of Firm Capital Allocation

Autor: Mauricio Larraín, Sebastian Stumpner

Abstract We study the effects of capital account liberalization on firm capital allocation and aggregate productivity in 10 Eastern European countries. Using a large firm-level data set, we show that capital account liberalization decreases the dispersion in the return to capital across firms, particularly in sectors more dependent on external finance. We provide evidence that capital account liberalization improves capital allocation by allowing financially constrained firms to demand more capital and produce at a more efficient level. Finally, using a model of misallocation we document that capital account liberalization increases aggregate productivity through more efficient capital allocation by 10% to 16%.

Fuente: Journal of Finance

Volume: 72, Issue: 4, Pages: 1825-1858

IF-2016: 6,043, AI-2016: 12,002

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