Using a panel of 27 countries, we analyze the effects of stock market liberalization on financial and macroeconomic development. We find that liberalization is associated with a short-term increase in real private investment growth of about 14 percentage points cumulatively in the four years following liberalization and a cumulative 4 percentage point increase in real GDP per capita growth. Growth tends to be higher if institutional reforms precede liberalization. In contrast to other studies, we also find evidence for a permanent growth effect of about 0.4 percent a year in an extended sample of 72 countries.variables, the liberalization effect may still reflect other policy reforms and not only the effect of stock market liberalization. ... STOCK MARKET LIBERALIZATION A. The Sample Using annual data from 1975 to 2000, we take a sample of 27anbsp;...
|Title||:||Stock Market Liberalizations|
|Author||:||Mr. Norbert Funke, Ms. Nicola Fuchs-Schündeln|
|Publisher||:||International Monetary Fund - 2001-12-01|