Opening Up of Stock Markets: Lessons from and for Emerging Economies

Mitsui Life Finanical Research Center, Working Paper No 93-18

Posted: 10 Sep 1999

See all articles by E. Han Kim

E. Han Kim

University of Michigan, Stephen M. Ross School of Business

Vijay Singal

Virginia Tech

Date Written: April 16, 1994

Abstract

This paper examines the benefits and risks of market internationalization by analyzing the effect of recent market openings in developing countries. We estimate changes in the return and volatility of stock prices, portfolio flows, and the volatility of portfolio flows around market openings. We find that stock prices, on average, increase upon market opening without a significant change in volatility. Furthermore, portfolio inflows to these countries are significantly positive following market openings, but without a concurrent increase in the volatility of portfolio flows; hence, the concern about "hot money" appears to be unwarranted.

JEL Classification: G15

Suggested Citation

Kim, E. Han and Singal, Vijay, Opening Up of Stock Markets: Lessons from and for Emerging Economies (April 16, 1994). Mitsui Life Finanical Research Center, Working Paper No 93-18. Available at SSRN: https://ssrn.com/abstract=5429

E. Han Kim

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States
734-764-2282 (Phone)
734-763-3117 (Fax)

Vijay Singal (Contact Author)

Virginia Tech ( email )

250 Drillfield Drive
Blacksburg, VA 24061
United States
5402317750 (Phone)

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