Stock Market Liquidity in Chile

30 Pages Posted: 16 Dec 2016

See all articles by Luis Brandao-Marques

Luis Brandao-Marques

International Monetary Fund - Monetary and Capital Markets Department

Date Written: November 2016


Chile has a large but relatively illiquid stock market. Global factors such as global risk appetite and monetary policy in advanced economies are key cyclical determinants of liquidity in Chilean equities. Evidence from a cross-section of emerging markets suggests strong protection of minority shareholders can help improve stock market liquitidity. Currently, illiquid in Chilean may have to pay 3 1/2 percent more as cost of equity. Corporate governance should be improved, namely through the adoption of a stewardship code.

Keywords: Stock markets, Chile, Liquidity, Business cycles, Corporate governance, Emerging markets, Cross country analysis, Panel analysis, Market liquidity; investor protection; corporate governance; liquidity premium.

JEL Classification: G12, G15, G23, G34

Suggested Citation

Brandao-Marques, Luis, Stock Market Liquidity in Chile (November 2016). IMF Working Paper No. 16/223. Available at SSRN:

Luis Brandao-Marques (Contact Author)

International Monetary Fund - Monetary and Capital Markets Department ( email )

700 19th Street, N.W.
Washington, DC 20431
United States
2026238308 (Phone)
2025898308 (Fax)

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