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Stock Market Liberalizations and Export Dynamics

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  • Jaud,Melise
  • Kukenova,Madina
  • Strieborny,Martin

Abstract

Foreign investors facilitate efficiency-enhancing structural change in the recipientcountries. After countries liberalize their stock markets and allow foreign investors to acquire equity stakes indomestic firms, products that do not correspond to the liberalizing countries' comparative advantage disappeardisproportionately faster from their export portfolios. At the same time, the overall long-term export performance ofthe liberalizing countries improves. Domestic stock market development does not have the same disciplining effect interminating inefficient exports. Foreign investors thus play a unique role in improving resource allocation in the real economy.

Suggested Citation

  • Jaud,Melise & Kukenova,Madina & Strieborny,Martin, 2023. "Stock Market Liberalizations and Export Dynamics," Policy Research Working Paper Series 10307, The World Bank.
    • Handle: RePEc:wbk:wbrwps:10307
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    More about this item

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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