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On the growth effect of stock market liberalizations

Gupta, Nandini and Yuan, Kathy (2009) On the growth effect of stock market liberalizations. Review of Financial Studies, 22 (11). pp. 4715-4752. ISSN 0893-9454

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Identification Number: 10.1093/rfs/hhp001

Abstract

We investigate the effect of a stock market liberalization on industry growth in emerging markets. Consistent with the view that liberalization reduces financing constraints, we find that industries that are more externally dependent and face better growth opportunities grew faster following liberalization. However, this growth increase appears to come from an expansion in the size of existing firms rather than through the entry of financially constrained new firms. We show that following liberalization, new firm growth occurs in countries and industries with lower entry barriers. Hence, liberalization has a more uniform growth impact if accompanied by competition-enhancing reforms.

Item Type: Article
Official URL: http://rfs.oxfordjournals.org/
Additional Information: © 2009 The Authors
Subjects: H Social Sciences > HG Finance
Sets: Departments > Finance
Collections > Economists Online
Date Deposited: 13 Jul 2011 12:34
Last Modified: 13 Jul 2011 12:35
URI: http://eprints.lse.ac.uk/id/eprint/37383

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