|
|
|
|
||||
|
||||
Global Growth Opportunities and Market IntegrationGeert BekaertColumbia Business School - Finance and Economics; National Bureau of Economic Research (NBER) Campbell R. HarveyDuke University - Fuqua School of Business; National Bureau of Economic Research (NBER) Christian T. LundbladUniversity of North Carolina Kenan-Flagler Business School Stephan SiegelUniversity of Washington - Michael G. Foster School of Business June 2006 EFA 2004 Maastricht Meetings Paper No. 1697 Abstract: We propose an exogenous measure of a country's growth opportunities by interacting the country's local industry mix with global price to earnings (PE) ratios. We find that these exogenous growth opportunities predict future changes in real GDP and investment in a large panel of countries. This relation is strongest in countries that have liberalized their capital accounts, equity markets, and banking systems. We also find that financial development, external finance dependence, and investor protection measures are much less important in aligning growth opportunities with growth than is capital market openness. Finally, we formulate new tests of market integration and segmentation by linking local and global PE ratios to relative economic growth.
Number of Pages in PDF File: 56 Keywords: Growth Opportunities, Market Integration, Finance and Growth, Capital Allocation, Capital Account Openness, Financial Liberalization JEL Classification: F30, F36, G15, O11, O57 working papers seriesDate posted: July 1, 2004Suggested CitationContact Information
|
|
|||||||||||||||||||||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo2 in 0.562 seconds
