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Stock market development under globalization : whither the gains from reforms ?

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Author Info
de la Torre, Augusto
Gozzi, Juan Carlos
Schmukler, Sergio L.

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Abstract

Over the past decades, many countries have implemented significant reforms to foster domestic capital market development. These reforms included stock market liberalization, privatization programs, and the establishment of regulatory and supervisory frameworks. Despite the intense reform efforts, the performance of capital markets in several countries has been disappointing. To study whether reforms have had the intended effects on capital markets, the authors analyze the impact of six capital market reforms on domestic stock market development and internationalization using event studies. They find that reforms tend to be followed by significant increases in domestic market capitalization, trading, and capital raising. Reforms are also followed by an increase in the share of activity in international equity markets, with potential negative spillover effects on domestic markets.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4184.

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Date of creation: 01 Apr 2007
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Handle: RePEc:wbk:wbrwps:4184

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Keywords: Markets and Market Access; Economic Theory&Research; Access to Markets; Privatization; Corporate Law;

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Full references

Cited by:
(explanations, 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.)

  1. Sergio L. Schmukler & Stijn Claessens, 2007. "International Financial Integration Through Equity Markets: Which Firms from Which Countries Go Global?," IMF Working Papers 07/138, International Monetary Fund. [Downloadable!]
    Other versions:
  2. de la Torre, Augusto & Gozzi, Juan Carlos & Schmukler, Sergio L., 2006. "Financial development in Latin America : big emerging issues, limited policy answers," Policy Research Working Paper Series 3963, The World Bank. [Downloadable!]
  3. de la Torre, Augusto & Gozzi, Juan Carlos & Schmukler, Sergio L., 2007. "Capital market development : whither Latin America ?," Policy Research Working Paper Series 4156, The World Bank. [Downloadable!]
    Other versions:
  4. Jamel Boukhatem, 2009. "Essai sur les déterminants empiriques de développement des marchés obligataires," EconomiX Working Papers 2009-32, University of Paris West - Nanterre la Défense, EconomiX. [Downloadable!]
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