Floating without flotations-the exchange rate and the Mexican stock market: 1995-2001
AbstractPegged exchange rates in capital importing countries partially 'socialised' the risks of international borrowing. A corollary of managed floating, therefore, is a reallocation of risk bearing to private capital markets. Equity finance offers explicit risk sharing but Mexican experience since 1995 confirms that it may not expand spontaneously under a floating regime, despite buoyant international conditions. As an explanation for this disappointing outcome, the analysis highlights the implications of managed floating for equity demand when corporate debt is high. Policy must recognize that while firms need to reduce gearing, investors may not be attracted to the shares of indebted companies. Copyright © 2006 John Wiley & Sons, Ltd.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by John Wiley & Sons, Ltd. in its journal Journal of International Development.
Volume (Year): 18 (2006)
Issue (Month): 3 ()
Contact details of provider:
Web page: http://www3.interscience.wiley.com/journal/5102/home
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Guillermo A. Calvo & Carmen M. Reinhart, 2000.
"Fear of Floating,"
NBER Working Papers
7993, National Bureau of Economic Research, Inc.
- Kathryn M.E. Dominguez & Linda L. Tesar, 2001.
"A Re-Examination of Exchange Rate Exposure,"
NBER Working Papers
8128, National Bureau of Economic Research, Inc.
- Kathryn M. E. Dominguez & Linda L. Tesar, 2001. "A Reexamination of Exchange-Rate Exposure," American Economic Review, American Economic Association, American Economic Association, vol. 91(2), pages 396-399, May.
- Kathryn M.E Dominguez & Linda L. Tesar, 2001. "A Re-Examination of Exchange Rate Exposure," Working Papers, Research Seminar in International Economics, University of Michigan 465, Research Seminar in International Economics, University of Michigan.
- Martin Schneider & Aaron Tornell, 2000.
"Balance SHeet Effects, Bailout Guarantees and Financial Crises,"
NBER Working Papers
8060, National Bureau of Economic Research, Inc.
- Martin Schneider & Aaron Tornell, 2004. "Balance Sheet Effects, Bailout Guarantees and Financial Crises," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 71, pages 883-913, 07.
- McKinnon, Ronald I. & Pill, Huw, 1998.
"International Overborrowing: A Decomposition of Credit and Currency Risks,"
World Development, Elsevier,
Elsevier, vol. 26(7), pages 1267-1282, July.
- Ronald I. McKinnon & Huw Pill, 1998. "International Overborrowing: A Decomposition of Credit and Currency Risks," Working Papers, Stanford University, Department of Economics 98004, Stanford University, Department of Economics.
- Martinez, Lorenza & Werner, Alejandro, 2002. "The exchange rate regime and the currency composition of corporate debt: the Mexican experience," Journal of Development Economics, Elsevier, Elsevier, vol. 69(2), pages 315-334, December.
- Barry Eichengreen & Ricardo Hausmann, 1999.
"Exchange rates and financial fragility,"
Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City,
Federal Reserve Bank of Kansas City, pages 329-368.
- Branson, William H. & Halttunen, Hannu & Masson, Paul, 1979. "Exchange rates in the short run : Some further results," European Economic Review, Elsevier, Elsevier, vol. 12(4), pages 395-402, October.
- Solnik, B H, 1974. "The International Pricing of Risk: An Empirical Investigation of the World Capital Market Structure," Journal of Finance, American Finance Association, American Finance Association, vol. 29(2), pages 365-78, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.