Capital Account Openness And Corporate Financing Constraints

With the trend of global financial integration,capital account opening is an important goal and direction of financial reform in all countries.Capital account opening will affect economic development and bank operation,as well as enterprise operation.Each country has a different process of capital account opening,and the effects of capital account opening vary from country to country.The empirical conclusions in the macro field are also different.These studies ignore the heterogeneity between enterprises,so it is necessary to explore the micro-economic impact of capital account opening between countries.According to theoretical analysis,the impact of capital account opening on enterprise financing constraints can be divided into "scale impact" and "quality impact".Scale impact refers to the impact on capital flow and domestic capital scale.Quality impact refers to the effect on enterprise financing constraints by affecting the efficiency of financial system and resource allocation efficiency.This paper studies the microeconomic impact of capital account opening across countries,financial data of 2719 listed companies from 11 economies(5 emerging market countries and 6 OECD countries)from 2009 to 2020 are collected to study the impact of capital account opening on listed companies financing constraints.Meanwhile capital account is divided into three parts including direct investment,equity and debt to study the impact of sub-projects.It is found that for the whole sample,capital account opening can ease the financing constraints of enterprises.However,for OECD countries the alleviating effect is not obvious,even intensify enterprise financing constraints;for emerging market countries,it will significantly ease enterprise financing constraints.The impact of sub-projects in emerging market countries is different,among which direct investment and equity investment will ease financing constraints,while debt investment will intensify financing constraints.It indicates that emerging market countries may not have reached the "threshold" of using foreign debt capital.Through the heterogeneity analysis of enterprise scale,it is found that capital account opening is more conducive to alleviating the financing constraints of small enterprises,which indicates that capital account opening improves the efficiency of resource allocation.It proves that capital account opening has the "qualitative impact".The capital account opening in different directions often has different effects.The empirical results show that capital account opening in different directions has no symmetry,which also shows that capital account opening not only affects the enterprises financing constraints through "scale effect".Based on comparative advantage,emerging economies have the great potential of development,so have a better ability to absorb foreign capital.Emerging economies should further enhance its ability to attract,manage and utilize foreign investment,develop the domestic financial system,promote the development of domestic economy.