Emerging Stock Market Liberalization And Currency Crises
The liberalization of emerging stock markets in Latin America and East Asia in the late 1980s and early 1990s was expected to make these equity markets more efficient and more integrated in world financial markets. However, large capital inflows in the first half of the 1990s were followed by sudden and huge capital outflows in the second half of the 1990s, which ultimately provoked severe currency and economic crises. It is possible that emerging stock markets remained inefficient despite their liberalization, and allowed speculative bubbles to develop and eventually burst. The main objective of this paper is therefore to test the efficiency of Latin American and East Asian equity markets before and after their liberalization. We also examine the integration of these emerging stock markets in world financial markets, and investigate the relationships between stock returns and currency crises over these two periods.
References listed on IDEAS
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.:
- Kawakatsu, Hiroyuki & Morey, Matthew R., 1999. "Financial liberalization and stock market efficiency: an empirical examination of nine emerging market countries," Journal of Multinational Financial Management, Elsevier, vol. 9(3-4), pages 353-371, November.
- Reinhart, Carmen & Reinhart, Vincent, 1998. "“Some Lessons for Policy Makers Who Deal with the Mixed Blessing of Capital Inflows,”," MPRA Paper 7123, University Library of Munich, Germany.
- Geert Bekaert & Campbell R. Harvey, 1997.
"Foreign Speculators and Emerging Equity Markets,"
NBER Working Papers
6312, National Bureau of Economic Research, Inc.
- Stiglitz, Joseph E, 1999. "The World Bank at the Millennium," Economic Journal, Royal Economic Society, vol. 109(459), pages F577-97, November.
- Geert Bekaert & Campbell R. Harvey & Christian Lundblad, 2001.
"Does Financial Liberalization Spur Growth?,"
NBER Working Papers
8245, National Bureau of Economic Research, Inc.
- Cartapanis, Andre & Dropsy, Vincent & Mametz, Sophie, 2002. "The Asian Currency Crises: Vulnerability, Contagion, or Unsustainability," Review of International Economics, Wiley Blackwell, vol. 10(1), pages 79-91, February.
- Sarno, Lucio & Taylor, Mark P., 1999. "Moral hazard, asset price bubbles, capital flows, and the East Asian crisis:: the first tests," Journal of International Money and Finance, Elsevier, vol. 18(4), pages 637-657, August.
When requesting a correction, please mention this item's handle: RePEc:ers:journl:v:iv:y:2001:i:1-2:p:109-. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Eleni Giannakopoulou)
If references are entirely missing, you can add them using this form.