Equity Market Liberalization and Firm Growth

30 Pages Posted: 4 Nov 2012

See all articles by Thomas O’Connor

Thomas O’Connor

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

Date Written: November 3, 2012

Abstract

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 mostly to the contrary, and at best, I find that investability is associated with no significant change in the contribution of external financing to firm growth. 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.

Keywords: external financing, investability, firm growth

JEL Classification: G15, G32

Suggested Citation

O'Connor, Thomas, Equity Market Liberalization and Firm Growth (November 3, 2012). Available at SSRN: https://ssrn.com/abstract=2170698 or http://dx.doi.org/10.2139/ssrn.2170698

Thomas O'Connor (Contact Author)

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

County Kildare
Ireland

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