Explaining the Migration of Stocks from Exchanges in Emerging Economies to International Centres
Stijn Claessens (stijn.claessens@yale.edu),
Sergio Schmukler and
Daniela Klingebiel
No 3301, CEPR Discussion Papers from C.E.P.R. Discussion Papers
Abstract:
We study the determinants of stock market development and the growing migration of capital raising, listing and trading activity to international exchanges. Economies with higher income per capita, sounder macro policies, more efficient legal systems with better shareholder protection, and more open financial markets have larger and more liquid markets. As such fundamentals improve, however, the degree of migration to international exchanges also increases. This leads to gains for corporations in the form of lower costs, better terms and more liquidly-traded shares. Fully-fledged local stock exchanges are thus becoming less necessary for many economies. Furthermore, migration can leave too little domestic activity to sustain a local exchange. Therefore, the functions and forms of stock exchanges in many economies need to be rethought.
Keywords: Stock exchange development; Trading migration; Emerging economies; Cross-listing; Adrs; Gdrs; Internationalization of financial markets (search for similar items in EconPapers)
JEL-codes: G15 G18 G20 (search for similar items in EconPapers)
Date: 2002-04
New Economics Papers: this item is included in nep-cfn and nep-fmk
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Citations: View citations in EconPapers (28)
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Working Paper: Explaining the Migration of Stocks from Exchanges in Emerging Economies to International Centres (2002)
Working Paper: Explaining the migration of stocks from exchanges in emerging economies to international centers (2002)
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