Abstract

http://ssrn.com/abstract=1519265
 
 

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On the Growth Effect of Stock Market Liberalizations


Nandini Gupta


Indiana University - Kelley School of Business - Department of Finance

Kathy Yuan


London School of Economics - Department of Finance

November 2009

The Review of Financial Studies, Vol. 22, Issue 11, pp. 4715-4752, 2009

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.

JEL Classification: E32, F30, F36, F43, G15, G18, G28

Accepted Paper Series





Not Available For Download

Date posted: December 8, 2009  

Suggested Citation

Gupta, Nandini and Yuan, Kathy, On the Growth Effect of Stock Market Liberalizations (November 2009). The Review of Financial Studies, Vol. 22, Issue 11, pp. 4715-4752, 2009. Available at SSRN: http://ssrn.com/abstract=1519265 or http://dx.doi.org/hhp001

Contact Information

Nandini Gupta (Contact Author)
Indiana University - Kelley School of Business - Department of Finance ( email )
1309 E. 10th St.
Bloomington, IN 47405
United States
812-855-3416 (Phone)
812-855-5875 (Fax)

Kathy Zhichao Yuan
London School of Economics - Department of Finance ( email )
Old Building
Houghton St
London, London WC2A 2AE
United Kingdom
+44 (0)20 7955 6407 (Phone)
+44 (0)20 7849 4647 (Fax)
HOME PAGE: http://fmg.lse.ac.uk/~kathy
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