Financial Liberalization and Stock Market Efficiency

ULICI Maria-Lenuta and Ioan Alin NISTOR
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Ioan Alin NISTOR: “Babes-Bolyai” University, Cluj Napoca
Authors registered in the RePEc Author Service: Maria Lenuta Ciupac-Ulici

Finante - provocarile viitorului (Finance - Challenges of the Future), 2011, vol. 1, issue 13, pages 154-160

Abstract: Stock market liberalization may have a favorable impact on the economy in many aspects. Many empirical studies have shown that liberalization had a positive effect on developing economies, resulting in diminishing the impact of the cost of capital, the increasing of returns and individuals investment. However, liberalization can make a country to be sensitive to some economic and foreign policy turbulence, leading, ultimately, to a higher volatility of domestic markets. In this article we intend to analyze the effect of emerging stock market liberalization on weak form efficiency hypothesis. Following the implementation of the liberalization process, we found that the analyzed emerging markets (Hungary, Poland, Czech Republic, Slovenia, Slovakia and Romania) are weak form efficiency markets (except the Slovak stock market, it was efficient before liberalization).

Keywords: financial liberalization; stock market efficiency; costs of capital; emerging markets (search for similar items in EconPapers)
JEL-codes: G10 G14 (search for similar items in EconPapers)
Date: 2011
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Persistent link: http://EconPapers.repec.org/RePEc:aio:fpvfcf:v:1:y:2011:i:13:p:154-160

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