Equity Market Liberalization in Emerging Market Economies PDF Download
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Author: Shamila Aruni Jayasuriya
Publisher:
ISBN:
Category : Stock exchanges
Languages : en
Pages : 148
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Book Description
Author: Shamila Aruni Jayasuriya
Publisher:
ISBN:
Category : Stock exchanges
Languages : en
Pages : 148
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Book Description
Author: Mr.Sergio L. Schmukler
Publisher: International Monetary Fund
ISBN: 1451845286
Category : Business & Economics
Languages : en
Pages : 61
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Book Description
We examine the short- and long-run effects of financial liberalization on capital markets. To do so, we construct a new comprehensive chronology of financial liberalization in 28 mature and emerging market economies since 1973. We also construct an algorithm to identify booms and busts in stock market prices. Our results indicate that financial liberalization is followed by more pronounced boom-bust cycles in the short run. However, financial liberalization leads to more stable markets in the long run. Finally, we analyze the sequencing of liberalization and institutional reforms to understand the contrasting short- and long-run effects of liberalization.
Author: Philippe Bacchetta
Publisher:
ISBN:
Category : Capital movements
Languages : en
Pages : 68
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Book Description
The paper analyzes the impact of financial liberalizations and reforms in emerging markets on the dynamics of capital flows to these markets, using a simple model of international investors' behavior. We first show that the gradual nature of liberalizations, combined with the cost of absorbing large inflows in emerging economies, leads to rich dynamics of capital flows and often implies an initial period of overshooting as portfolios adjust. Asset prices will overshoot as well. Second, we show that if investors have incomplete information about new emerging markets, and learn over time, there can be high volatility of capital flows as well as contagion. Finally, we provide numerical estimates of long run capital inflows to emerging market economies and compare them to actual inflows. This gives a good indicator of upcoming crisis situations.
Author: Leonardo E. Stanley
Publisher: Anthem Press
ISBN: 1783086750
Category : Business & Economics
Languages : en
Pages : 260
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Book Description
In the past, foreign shocks arrived to national economies mainly through trade channels, and transmissions of such shocks took time to come into effect. However, after capital globalization, shocks spread to markets almost immediately. Despite the increasing macroeconomic dangers that the situation generated at emerging markets in the South, nobody at the North was ready to acknowledge the pro-cyclicality of the financial system and the inner weakness of “decontrolled” financial innovations because they were enjoying from the “great moderation.” Monetary policy was primarily centered on price stability objectives, without considering the mounting credit and asset price booms being generated by market liquidity and the problems generated by this glut. Mainstream economists, in turn, were not majorly attracted in integrating financial factors in their models. External pressures on emerging market economies (EMEs) were not eliminated after 2008, but even increased as international capital flows augmented in relevance thereafter. Initially economic authorities accurately responded to the challenge, but unconventional monetary policies in the US began to create important spillovers in EMEs. Furthermore, in contrast to a previous surge in liquidity, funds were now transmitted to EMEs throughout the bond market. The perspective of an increase in US interest rates by the FED is generating a reversal of expectations and a sudden flight to quality. Emerging countries’ currencies began to experience higher volatility levels, and depreciation movements against a newly strong US dollar are also increasingly observed. Consequently, there are increasing doubts that the “unexpected” favorable outcome observed in most EMEs at the aftermath of the Global Financial Crisis (GFC) would remain.
Author: Geert Bekaert
Publisher:
ISBN:
Category :
Languages : en
Pages : 39
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Book Description
Equity market liberalizations, if effective, lead to important changes in both the financial and real sectors as the economy becomes integrated into world capital markets. The study of market integration is complicated because there are many ways one can liberalize and many countries have taken different routes. To study the effectiveness of particular liberalization policies, the sequencing of liberalizations, and the impact on the real economy, systematic methods must be developed to 'date' the liberalization of emerging equity markets. We provide a synthesis of the current methods, and also show the impact of liberalization on the real sector.
Author: Mohamed El Hedi Arouri
Publisher: Springer Science & Business Media
ISBN: 3790823899
Category : Business & Economics
Languages : en
Pages : 214
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Book Description
Emerging markets have received a particular attention of academic researchers and practitioners since they decided to open their domestic capital markets to foreign participants about three decades ago. At the same time, we remark that theoretical and empirical research in emerging stock markets has been particularly challenged by their fast changes in nature and size under the effects of financial liberalization and reforms. This evolving feature has particularly led to a commensurate increase in sophistication of modeling techniques used for understanding financial markets. In this spirit, the book aims at providing the audience a comprehensive understanding of emerging stock markets in various aspects using modern financial econometric methods. It addresses the empirical techniques needed by economic agents to analyze the dynamics of these markets and illustrates how they can be applied to the actual data. On the other hand, it presents and discusses new research findings and their implications.
Author: Lena Lee Andresen
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
This paper tests the effect of equity market liberalization on economic growth in emerging markets in light of the question whether the current degree of financial globalization is here to stay. Financial history shows that the degree of financial integration we witness today is not the result of a linear development. Already in former times, periods of more and less pronounced integration have alternated. Thus, the continued existence of a liberalized financial order is by no means a given. The recent financial crisis has increased doubts on whether the economic benefits, such as economic growth in emerging markets, outweigh the cost of financial integration, which is mainly the increased risk of financial crisis. Additionally, in the current economic environment, there seems to be too little political ability or will to sustain and strengthen the current international financial system. At the same time, empirical evidence on the economic growth effect of capital account liberalization, a broad measure for financial liberalization, is inconclusive. Better results have been found for the more narrow concept of equity market liberalization but research on the subject is outdated and geographically limited. Using panel data least squares with fixed effects, this study estimates the growth effect of equity market liberalization, based on an updated data set from 1980 to 2009 that includes the majority of emerging economies. It is shown that the effect of equity market liberalization on economic growth is highly fragile. This confirms the inconclusive growth effect of the broader financial liberalization.
Author: R. David McLean
Publisher:
ISBN:
Category :
Languages : en
Pages : 42
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Book Description
Previous studies link equity market liberalization to economic growth in emerging markets. In the 24 emerging markets that we study, liberalizations always coincide with other economic reforms, making identification difficult. Theories linking liberalization to growth predict that at the firm-level, liberalization leads to significant foreign ownership and influence on management, more external finance, and higher investment. Using firm-level data, we find no evidence supporting these theories. Our findings suggest that either equity market liberalization does not cause growth, or that it promotes growth through an indirect channel that is overlooked in the current literature.
Author: Kathryn C. Lavelle
Publisher: Oxford University Press
ISBN: 0190291710
Category : Business & Economics
Languages : en
Pages : 296
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Book Description
Emerging market stock issuance relative to GDP rose in the late twentieth century to levels that roughly matched that of advanced, industrial markets. Nonetheless, the connection between owning shares of emerging market stock and the ability to influence the management of these firms remains fundamentally different from the analogous institutional connection that has evolved in industrial markets. The reasons for the differences in emerging markets are both historical and political in nature. That is, local equity markets have had the objective of providing for some degree of local ownership and control of large economic entities since the late nineteenth century. However, local markets have operated under different global political structures since that time, ranging from imperialism, to world wars, to sovereign developmental states, to neo-liberal states. Shares issued under these different structures have been reconfigured over time, resulting in a lack of convergence along either the Anglo-American or Continental models of corporate governance. The author uses a political science paradigm to explain the growth of emerging equity markets. She departs from conventional economic explanations and examines politics at the micro-level of large issues of emerging market stock. The second half of the book presents case studies dealing with emerging market countries in Latin America, Asia, Russia and Eastern Europe, Africa and the Middle East. The case studies connect the regional, state, and firm levels to detail the multiple ownership and control arrangements, and to dispel the notion that mere quantitative growth of these markets will lead to a convergence in financial institutional structures along the lines of the industrial core of the world economy.
Author: Augusto de la Torre
Publisher: Stanford University Press
ISBN: 9780804757195
Category : Social Science
Languages : en
Pages : 232
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Book Description
Emerging Capital Markets and Globalization analyzes where we stand and where we are heading on capital market development, the state and evolution of Latin American capital markets and related reforms, measuring the impact of reforms, and discusses the prospects for capital market development in Latin America and emerging economies and the implications for the reform agenda
