State capitalism and capital markets: Comparing securities exchanges in emerging markets

Johannes Petry, Kai Koddenbrock and Andreas Nölke
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Johannes Petry: 2707SCRIPTS Cluster of Excellence, 9166Free University of Berlin, Berlin, Germany
Kai Koddenbrock: Africa Multiple Cluster of Excellence, 26523University of Bayreuth, Bayreuth, Germany
Andreas Nölke: Institute for Political Science, 9173Goethe University Frankfurt, Frankfurt am Main, Germany

Environment and Planning A, 2023, vol. 55, issue 1, 143-164

Abstract: Finance plays a major role in discussions about state capitalism in emerging markets, but the focus has so far been on banks. Capital markets have been neglected. Moreover, findings from the growing literature on financialization in emerging markets indicate that in some cases there is increasing state involvement in the development and functioning of capital markets. Hence, the relationship between the state and finance in these economies may be fundamentally different from the picture provided by liberal Western-centric perspectives. Instead of looking at capital markets as uniform entities, we propose to analyse them as variegated – while characterized by common financialization processes, they can be informed by different institutional logics, leading to very different market dynamics and outcomes. We explore to what extent these differences exist and how state-capitalist economies facilitate capital market development. Our comparative institutional analysis of securities exchanges as central parts of capital markets in six increasingly financialized emerging market economies – Brazil, China, India, Russia, South Africa and South Korea – focuses on the degree to which capital markets are integrated into state-capitalist institutions. Instead of mere platforms on which market transactions take place, we analyse exchanges as powerful actors which actively shape capital markets. While in most advanced economies exchanges are situated within an institutional setting informed by neoliberal institutional logic, we demonstrate that exchanges in emerging markets often organize capital markets to facilitate state objectives.

Keywords: Financialization; emerging markets; state capitalism; capital markets; neoliberalism (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:sae:envira:v:55:y:2023:i:1:p:143-164

DOI: 10.1177/0308518X211047599

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