A note on how to enhance liquidity in emerging markets by levering on trading participants
Stefano Alderighi ()
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Stefano Alderighi: Senior Economist, World Federation of Exchanges. Visiting Research Fellow, University of Essex.
Economics Bulletin, 2017, vol. 37, issue 4, 2526-2532
This note reviews the academic and non-academic literature on the relation between stock market participation and liquidity, with a particular focus on emerging markets. The paper concentrates on the three main investor categories considered relevant to enhance stock market liquidity: domestic institutional, retail and international investors. Based on the review of the literature, the paper concludes that to enhance stock market liquidity, emerging markets should avoid domestic institutional concentration, balance retail and institutional participation and gradually liberalise the market to foreign investors.
Keywords: Liquidity; Investor composition; Institutional concentration; Liberalization (search for similar items in EconPapers)
JEL-codes: G1 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-17-00648
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