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Equity market liberalization and firm growth

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  • Thomas O'Connor

    (Department of Economics Finance and Accounting, National University of Ireland, Maynooth)

Abstract

Using a sample of 686 investable firms from 26 emerging market countries, I show that equity market liberalizations do not result in an increase in externally-financed growth rates for participating firms. In fact, I find to the contrary. The average firm appears to rely less and not more on external-financing once they become investable. These findings are in line with recent work which shows that firms issue less equity capital post-liberalization, and suggest that the gains from equity market liberalizations may not be attributable to a reduction in financing constraints.

Suggested Citation

  • Thomas O'Connor, 2012. "Equity market liberalization and firm growth," Economics Department Working Paper Series n231-12.pdf, Department of Economics, National University of Ireland - Maynooth.
    • Handle: RePEc:may:mayecw:n231-12.pdf
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    References listed on IDEAS

    as
    1. Bekaert, Geert & Harvey, Campbell R. & Lundblad, Christian, 2005. "Does financial liberalization spur growth?," Journal of Financial Economics, Elsevier, vol. 77(1), pages 3-55, July.
    2. Chari, Anusha & Blair Henry, Peter, 2008. "Firm-specific information and the efficiency of investment," Journal of Financial Economics, Elsevier, vol. 87(3), pages 636-655, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    External financing; Investability; Firm growth.;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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