Domestic Capital Market Reform and Access to Global Finance: Making Markets Work / Peter Blair Henry, Peter Lombard Lorentzen.

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Henry, Peter Blair

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w10064.Publication details: Cambridge, Mass. National Bureau of Economic Research 2003.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: Contrary to the predictions of standard economic theory, capital market liberalization has been a mixed blessing for many countries. Liberalization of debt inflows exposes economies to the risk of crises stemming from sudden changes in investor sentiment. Equity market liberalizations, on the other hand, have promoted growth in almost every liberalizing country. Yet equity market liberalizations have not had as strong an effect as might be expected. To convince outsiders to invest, countries must put in place laws and supporting institutions to protect the rights of minority shareholders. Countries with such protections tend to have larger, more efficient, and more stable stock markets than those that do not.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w10064 (Browse shelf(Opens below))	Not For Loan

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Previous	nber w10061 The Unholy Trinity of Financial Contagion /	nber w10062 Benefit Plan Design and Prescription Drug Utilization Among Asthmatics: Do Patient Copayments Matter? /	nber w10063 Consequences and Predictors of New Health Events /	nber w10064 Domestic Capital Market Reform and Access to Global Finance: Making Markets Work /	nber w10065 Revisiting Some Productivity Debates /	nber w10066 Why the Apple Doesn't Fall Far: Understanding Intergenerational Transmission of Human Capital /	nber w10067 Globalizing Activities and the Rate of Survival: Panel Data Analysis on Japanese Firms /	Next

November 2003.

Contrary to the predictions of standard economic theory, capital market liberalization has been a mixed blessing for many countries. Liberalization of debt inflows exposes economies to the risk of crises stemming from sudden changes in investor sentiment. Equity market liberalizations, on the other hand, have promoted growth in almost every liberalizing country. Yet equity market liberalizations have not had as strong an effect as might be expected. To convince outsiders to invest, countries must put in place laws and supporting institutions to protect the rights of minority shareholders. Countries with such protections tend to have larger, more efficient, and more stable stock markets than those that do not.