Economics, Econometrics and Finance
4 years ago

Capital controls hike corporate bond costs, hitting financially constrained firms hardest.

SSRN Electronic Journal
Capital Controls and the Cost of Debt
Eugenia Andreasen, Martin Schindler, Patricio Valenzuela

Paper Summary

Restrictions on money coming into a country make it more expensive for companies to borrow money through bonds. This is especially true for companies that already have financial difficulties. However, restrictions on money leaving a country do not have a significant impact on bond costs.

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