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Stock Market Openings: Experience of Emerging Economies

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  • Kim, E Han
  • Singal, Vijay

Abstract

This article is an exploratory examination of the benefits and risks associated with opening of stock markets. Specifically, we estimate changes in the level and volatility of stock returns, inflation, and exchange rates around market openings. We find that stock returns increase immediately after market opening without a concomitant increase in volatility. Stock markets become more efficient as determined by testing the random walk hypothesis. We find no evidence of an increase in inflation or an appreciation of exchange rates. If anything, inflation seems to decrease after market opening as do the volatility of inflation and volatility of exchange rates. Copyright 2000 by University of Chicago Press.

Suggested Citation

  • Kim, E Han & Singal, Vijay, 2000. "Stock Market Openings: Experience of Emerging Economies," The Journal of Business, University of Chicago Press, vol. 73(1), pages 25-66, January.
  • Handle: RePEc:ucp:jnlbus:v:73:y:2000:i:1:p:25-66
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    File URL: http://dx.doi.org/10.1086/209631
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