Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/144267
Authors: 
Bekaert, Geert
Harvey, Campbell R.
Lundblad, Christian
Year of Publication: 
2004
Series/Report no.: 
Working Paper Research 53
Abstract: 
We show that equity market liberalizations, on average, lead to a one percent increase in annual real economic growth over a five-year period. The effect is robust to alternative definitions of liberalization and does not reflect variation in the world business cycle. The effect also remains intact when liberalization is instrumented with quality of institutions-variables that explain liberalization but not growth and when a growth opportunity measure is included in the regression. Capital account liberalization has a less robust effect on growth than equity market liberalization has. Other simultaneous reforms only partially account for the effect. Finally, we examine why some countries respond to equity market liberalization differently from others.
Document Type: 
Working Paper

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