Nascent markets: Understanding the success and failure of new stock markets

Thorsten Beck, Jose Albuquerque de Sousa, Mathijs van Dijk () and Peter Bergeijk

No 11604, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study the success and failure of 59 newly established (“nascent†) stock markets since 1975 in their first 40 years of activity. Nascent markets differ markedly in their success, as measured by number of listings, market capitalisation, and trading activity. Long-term success is in part determined by early success: a high initial number of listings and trading activity are necessary, though not sufficient, conditions for long-term success. Banking sector development at the time of establishment and development of national savings over the life of the stock market are the other two most reliable predictors of success. We find little evidence that structural factors such as country size or legal and political institutions matter. Rather, our results point to an important role of banks, demand factors, and initial success in fostering long-term stock market development.

Keywords: Stock exchanges; Financial development (search for similar items in EconPapers)
JEL-codes: G10 G18 O16 (search for similar items in EconPapers)
Date: 2016-11
New Economics Papers: this item is included in nep-cfn and nep-fmk
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://cepr.org/publications/DP11604 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Nascent markets: Understanding the success and failure of new stock markets (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:11604

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP11604

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().