Explaining the Migration of Stocks from Exchanges in Emerging Economies to International Centers
The authors study the determinants of the growing migration of stock market activity to international financial centers. They use a sample of 77 countries and document that higher economic growth and more macroeconomic stability help stock market d...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2002/03/1752444/explaining-migration-stocks-exchanges-emerging-economies-international-centers http://hdl.handle.net/10986/14814 |
| Summary: | The authors study the determinants of
the growing migration of stock market activity to
international financial centers. They use a sample of 77
countries and document that higher economic growth and more
macroeconomic stability help stock market development.
Countries with higher income per capita, sounder
macroeconomic policies, more efficient legal systems, better
shareholder protection, and more open financial markets tend
to have larger and more liquid stock markets. The authors
show that these factors also drive the degree with which
capital raising, listing, and trading have been migrating to
international financial centers. As fundamentals improve and
technology advances, this migration will likely increase and
domestic stock market activity may become too little to
support local markets. For many emerging economies, the best
policy is to establish sound fundamentals but not
necessarily the trading, or even listing of securities locally. |
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