RIEB Discussion Paper Series No.2025-35

Title

Capital Flow Management Measures and Capital Flows: Evidence from India

Abstract

This study empirically examines the relationship between capital flow management measures (CFMs) and capital flows in India. Using the local projection method and monthly de jure data constructed by Binici et al. (2024), we find that changes in CFMs are associated with significant responses in capital flows across all examined asset categories, including portfolio, equity, debt, and FDI inflows, as well as portfolio and FDI outflows.

Keywords

Capital flow management measures (CFMs); Capital controls; India; Local projection

JEL Classification

F38, F32, G15

Inquiries

Yang ZHOU
Graduate School of Economics, Nagoya City University, JAPAN

Shigeto KITANO
Research Institute for Economics and Business Administration
Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: +81-78-803-7036
FAX: +81-78-803-7059