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Equity market liberalization and firm growth


  • Thomas O'Connor

    () (Department of Economics Finance and Accounting, National University of Ireland, Maynooth)


Using a sample of 686 investable firms from 26 emerging market countries, I show that equity market liberalizations do not result in an increase in externally-financed growth rates for participating firms. In fact, I find to the contrary. The average firm appears to rely less and not more on external-financing once they become investable. These findings are in line with recent work which shows that firms issue less equity capital post-liberalization, and suggest that the gains from equity market liberalizations may not be attributable to a reduction in financing constraints.

Suggested Citation

  • Thomas O'Connor, 2012. "Equity market liberalization and firm growth," Economics, Finance and Accounting Department Working Paper Series n231-12.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
  • Handle: RePEc:may:mayecw:n231-12.pdf

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    References listed on IDEAS

    1. Chari, Anusha & Blair Henry, Peter, 2008. "Firm-specific information and the efficiency of investment," Journal of Financial Economics, Elsevier, vol. 87(3), pages 636-655, March.
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    External financing; Investability; Firm growth.;

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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