Explaining the Migration of Stocks from Exchanges in Emerging Economies to International Centres

42 Pages Posted: 9 May 2002

See all articles by Stijn Claessens

Stijn Claessens

Bank for International Settlements (BIS)

Daniela Klingebiel

World Bank - Policy Unit

Sergio L. Schmukler

World Bank - Development Research Group (DECRG)

Date Written: April 2002

Abstract

We study the determinants of stock market development and the growing migration of capital raising, listing and trading activity to international exchanges. Economies with higher income per capita, sounder macro policies, more efficient legal systems with better shareholder protection, and more open financial markets have larger and more liquid markets. As such fundamentals improve, however, the degree of migration to international exchanges also increases. This leads to gains for corporations in the form of lower costs, better terms and more liquidly-traded shares. Fully-fledged local stock exchanges are thus becoming less necessary for many economies. Furthermore, migration can leave too little domestic activity to sustain a local exchange. Therefore, the functions and forms of stock exchanges in many economies need to be rethought.

Keywords: Stock exchange development, trading migration, emerging economies, cross-listing, ADRs, GDRs, internationalization of financial mark

JEL Classification: G15, G18, G20

Suggested Citation

Claessens, Stijn and Klingebiel, Daniela and Schmukler, Sergio, Explaining the Migration of Stocks from Exchanges in Emerging Economies to International Centres (April 2002). CEPR Discussion Paper No. 3301. Available at SSRN: https://ssrn.com/abstract=311119

Stijn Claessens (Contact Author)

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

Daniela Klingebiel

World Bank - Policy Unit ( email )

1818 H Street NW
Room MC 9-903
Washington, DC 20433
United States
202-473-7470 (Phone)
202-522-2031 (Fax)

Sergio Schmukler

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN MC 3-301
Washington, DC 20433
United States
202-458-4167 (Phone)
202-522-3518 (Fax)

HOME PAGE: http://www.worldbank.org/en/about/people/s/sergio-schmukler

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