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Cross-border listings, capital controls, and equity flows to emerging markets

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  • Edison, Hali J.
  • Warnock, Francis E.

Abstract

We investigate the impact of two types of financial liberalizations on short- and long-horizon capital flows to emerging markets in a framework that controls for push and pull factors. The first type of liberalization, a reduction in capital controls, is countrywide but uncertain, because its extent and permanence are not known with certainty. The second type, a cross-border listing, is a firm-level liberalization that has no uncertainty. Consistent with theoretical predictions, we find that the deterministic cross-listing results in an immediate but short-lived increase in capital inflows. In contrast, the uncertain reduction in capital controls results in increased inflows only over a longer horizon, if at all.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of International Money and Finance.

Volume (Year): 27 (2008)
Issue (Month): 6 (October)
Pages: 1013-1027

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Handle: RePEc:eee:jimfin:v:27:y:2008:i:6:p:1013-1027

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Web page: http://www.elsevier.com/locate/inca/30443

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