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Capital account liberalization and economic performance in Malaysia


Law, Siong Hook and Wan Ngah, Wan Azman Saini (2013) Capital account liberalization and economic performance in Malaysia. The Singapore Economic Review, 58 (3). art. no. 1350022. pp. 1-22. ISSN 0217-5908; ESSN: 1793-6837


This study examines the impact of capital account liberalization on economic growth in Malaysia from 1970 to 2004. It uses two measures of capital account openness, namely de jure (an index of liberalization) and de facto (the volume of capital flows). The empirical results based on the modified growth model demonstrate that the de jure measure of capital account liberalization shows an adverse effect on growth in Malaysia. However, the de facto measure shows a robust positive effect on economic growth. The results also highlight that the effect of capital account liberalization on growth is contingent on a country's level of financial development and the quality of its institutions.

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Additional Metadata

Item Type: Article
Divisions: Faculty of Economics and Management
DOI Number: https://doi.org/10.1142/S0217590813500227
Publisher: World Scientific Publishing
Keywords: Capital account openness; Economic growth; Institutions; Financial development; Bounds test
Depositing User: Nabilah Mustapa
Date Deposited: 25 Jul 2015 13:47
Last Modified: 01 Oct 2015 03:57
Altmetrics: http://www.altmetric.com/details.php?domain=psasir.upm.edu.my&doi=10.1142/S0217590813500227
URI: http://psasir.upm.edu.my/id/eprint/28314
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