Paper Title
Impact of Capital Controls on Foreign Direct Investment: A Cross Section Panel Analysis

Abstract
This paper investigates the impact of restrictive capital policy on foreign direct investment (FDI). The analysis is pursued with the data from 96 developing countries for the period 2000-2019. Results are obtained using a Generalized Method of Moments (GMM) and with the inclusion of several economic indicators. The results suggest during this period restrictions increased the flow of foreign capital for the overall sample, which contradicts previous studies where all the capital control variables were found to have negative impact on foreign investment. Furthermore, the impact of capital controls on FDI varied by region. For Sub-Sahara-African and Latin-American countries a liberal capital policy regime was a significant determinant of FDI. In contrast for the East-Asian and Middle East countries restrictive policy seemed to accelerate FDI. In such cases of heterogeneity across regions, an ideal policy measure would be to come out of the concept of “one-size fits all” policy and take measures that are directed to each country and region separately.