Emerging Equity Markets: Growth, Benefits, and Policy Concerns

Manmohan Kumar and Robert Feldman

No 1994/007, IMF Policy Discussion Papers from International Monetary Fund

Abstract: Since the mid-1980s, there has been a very substantial increase in stock market activity in many developing countries. This paper first examines the main characteristics of the emerging stock markets, and illustrates the evolution of equity prices in these markets over the last decade. It then discusses the reasons for the markets’ growth and assesses the extent to which domestic policies, as well as external factors, have played a role. This is followed by a discussion of the likely benefits of these markets; the effects which any abrupt correction in stock prices could have for the economy; and the ways in which these markets can be made more efficient.

Keywords: PDP; market; market liquidity; market efficiency; adverse selection; equity price; market manipulation; market capitalization; Stock markets; Emerging and frontier financial markets; Stocks; Asset prices; Accounting standards; Africa; Middle East; East Asia; South Asia (search for similar items in EconPapers)
Pages: 34
Date: 1994-03-01
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