Enterprise ownership constraints and the role of equity markets in financial development

P. N. Snowden

Journal of Development Studies, 1997, vol. 34, issue 1, 131-148

Abstract: The long standing controversy of the contribution of equity markets to economic development has been reactivated by the emerging markets phenomenon. Positive reassessments have emphasised diversification and liquidity gains for investors funding risky, long lived, projects. The present analysis adopts instead the viewpoint of the issuer; the owner controlled enterprise typical of LDCs. Owners' wealth is a fundamental constraint on expansion when gearing is limited by bankruptcy risk and minority equity issue eases this constraint. It is suggested that equity and debt are thus complementary and that stock markets may improve overall allocative efficiency if equities correctly value firm prospects.

Date: 1997
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/00220389708422506 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:jdevst:v:34:y:1997:i:1:p:131-148

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/FJDS20

DOI: 10.1080/00220389708422506

Access Statistics for this article

Journal of Development Studies is currently edited by Howard White, Oliver Morrissey and Ken Shadlen

More articles in Journal of Development Studies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().