Social Against Mobile Capital: Explaining Cross-National Variations in Stock Market Size in the OECD

D. Verdier

Working Papers from European Institute - Political and Social Sciences

Abstract: What accounts for variations in the size of OECD stock markets? Existing answers point to the negative impact of state control over industry, enhanced by state centralization, and mitigated by common law. I counter that state centralization has a positive impact on stock market growth as well. It holds in check local governments' resistance to the centripetal mobility of capital, without which stock markets cannot develop. I provide empirical evidence of this dual effect by identifying variables for each effect and regressing them together against stock market capitalization on a cross-sectional population of OECD countries.

Keywords: STOCK MARKET; LAW; CAPITAL (search for similar items in EconPapers)
JEL-codes: G15 G19 O52 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:fth:europs:2001/2

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