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On IMF debt and capital control: evidence from Malaysia, Thailand, Indonesia, the Philippines and South Korea

Azhar Mohamad (Department of Finance, Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, Kuala Lumpur, Malaysia)
Imtiaz Mohammad Sifat (Department of Accounting and Finance, School of Business, Monash University, Subang Jaya, Selangor, Malaysia)
Hassanudin Mohd Thas Thaker (Department of Economics and Finance, Sunway University Business School, Sunway University, Petaling Jaya, Selangor, Malaysia)
Anwar Muhammad Noor (Institute of Islamic Banking and Finance, International Islamic University Malaysia, Kuala Lumpur, Malaysia)

Journal of Financial Regulation and Compliance

ISSN: 1358-1988

Article publication date: 31 July 2020

Issue publication date: 10 May 2021

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587

Abstract

Purpose

This study aims to investigate the effects of capital control and external debts after the 1997 financial crisis.

Design/methodology/approach

Using system estimation approach, the authors estimate a panel data-based econometric model for data on Malaysia, Thailand, Indonesia, the Philippines and South Korea from 1990 to 2017.

Findings

The authors find that on average, the crisis-hit South East Asian economies choosing external debt perform better in achieving greater economic growth and rebound better compared to economies imposing capital control.

Originality/value

This study attempts to answer whether a crisis-hit country should impose capital control or opt for external debt to recuperate from the crisis.

Keywords

Citation

Mohamad, A., Sifat, I.M., Mohd Thas Thaker, H. and Noor, A.M. (2021), "On IMF debt and capital control: evidence from Malaysia, Thailand, Indonesia, the Philippines and South Korea", Journal of Financial Regulation and Compliance, Vol. 29 No. 2, pp. 143-162. https://doi.org/10.1108/JFRC-08-2019-0108

Publisher

:

Emerald Publishing Limited

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