Measuring the Functional Efficiency of Capital Markets

Johan Erik Eklund () and Sameeksha Desai ()

No 2008-051, Jena Economic Research Papers in Economics from Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics, Thueringer Universitaets- und Landesbibliothek

Abstract: We apply the accelerator principle to measure the functional efficiency of capital markets. We estimate the elasticity of capital with respect to output using a panel of firms across 44 countries, and compare the results with existing approaches. Furthermore, we correlate our measure with corporate governance institutions.

Keywords: Allocation of capital; accelerator principle; functional efficiency (search for similar items in EconPapers)
JEL-codes: C00 G32 P00 (search for similar items in EconPapers)
Date: 2008-06-18

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Persistent link: http://EconPapers.repec.org/RePEc:jrp:jrpwrp:2008-051

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