The Invisible Hand in Emerging Markets
We present the first firm-level analysis of stock market liberalization on investment. In the year that an emerging economy liberalizes, the growth rate of its typical firm^Òs capital stock exceeds the pre-liberalization mean by 4.1 percentage points. In each of the next three years the average growth rate of the capital stock for the 369 firms in our five-country sample exceeds its pre-liberalization mean by 6.1 percentage points. While liberalization leads to an increase in average investment, there is no evidence that the firm-specific differences in the post-liberalization investment increases are driven by firm-specific variation in changes in the cost of capital or investment opportunities. In other words, in the aftermath of stock market liberalizations, the invisible hand allocates more capital to emerging market firms, but it appears to do so in a somewhat indiscriminate manner.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||11 Aug 2004|
|Contact details of provider:|| Phone: 1 212 998 3820|
Fax: 1 212 995 4487
Web page: http://www.econometricsociety.org/pastmeetings.asp
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ecm:nawm04:629. 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: (Christopher F. Baum)
If references are entirely missing, you can add them using this form.