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Stock Market Liberalization and Operating Performance at the Firm Level

34 Pages Posted: 13 Jan 2005  

Todd Mitton

Brigham Young University - J. Willard and Alice S. Marriott School of Management

Date Written: August 2005

Abstract

I use firm-specific measures of openness to foreign investors to study the impact of stock market liberalization on firm-level operating performance. In a sample of over 1,100 firms from 28 countries, firms with stocks that are open to foreign investors experience higher growth, greater investment, greater profitability, greater efficiency, and lower leverage. Strategies to address potential endogeneity suggest that the observed relationship, at least in part, reflects a causal effect of openness on operating performance.

Keywords: Financial liberalization, Investability, Foreign investors, Operating performance

JEL Classification: G15, G32, F36, F43

Suggested Citation

Mitton, Todd, Stock Market Liberalization and Operating Performance at the Firm Level (August 2005). Available at SSRN: https://ssrn.com/abstract=648282 or http://dx.doi.org/10.2139/ssrn.648282

Todd Mitton (Contact Author)

Brigham Young University - J. Willard and Alice S. Marriott School of Management ( email )

Provo, UT 84602
United States
801-422-1763 (Phone)

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