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Malaysian Capital Controls: Macroeconomics and Institutions
Author:
Ms. Natalia T. Tamirisa
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,
Mr. Simon Johnson
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,
Ms. Kalpana Kochhar
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, and
Todd Mitton null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2006: Issue 051
Language:
English
Publication Date:
01 Feb 2006
DOI:
https://doi.org/10.5089/9781451863116.001
ISBN:
9781451863116
ISSN:
1018-5941
Pages:
51
Keywords:
WP; capital control; PMC firm; stockbroking company; unconnected firm
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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We analyze the capital controls imposed in Malaysia in September 1998. In macroeconomic terms, these controls neither yielded major benefits nor were costly. At the same time, the stock market interpreted the capital controls (and associated events) as favoring firms with stronger political connections, and some connected firms reportedly received advantages immediately following the crisis. Analysis of financial accounts indicates that connected firms outperformed unconnected firms before the 1997-98 crisis but not afterward. After the crisis, connected firms were either not supported as much as the market had expected or the benefits they received were not manifest in their published accounts.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund