Capital Controls, Corporate Debt and Real Effects: Evidence from Boom and Crisis Times


  • Borradores de Economia


  • We show that capital controls (CC), by slowing-down firm debt-growth in the boom, improve firm performance during crises. Exploiting a tax on foreign-currency (FX) debt inflows in Colombia before the Global Financial Crisis (GFC) and multiple firm-level and loan-level administrative datasets, we find that CC reduce FX-debt inflows. Firms with weaker local banking relation nships cannot fully substitute FX-debt with domestic-debt, thereby reducing firm-level total debt and imports during the boom. However, by preemptively reducing firm-level debt, CC boost exports and employment during the subsequent GFC, especially for financially-constrained firms. Moreover, CC do not significantly alter credit allocation between productive and unproductive firms.

fecha de publicación

  • 2023

Líneas de investigación

  • capital controls
  • capital inflows
  • controles de capital
  • crises
  • crisis
  • deuda en moneda extranjera
  • efectos reales
  • entradas de capital
  • firm FX-debt
  • macroprudential policy
  • política macroprudencial
  • real effects


  • 1244