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

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.