Cross-Border Listings, Capital Controls, and Equity Flows to Emerging Markets

By Hali J. Edison, F. Warnock. Social Science Research Network, 2003

164 citations recorded by the source corpus.

We investigate the impact of two types of financial liberalizations on short- and long-horizon capital flows to emerging markets in a framework that controls for push and pull factors. The first type of liberalization, a reduction in capital controls, is countrywide but uncertain, because its extent and permanence is not known with certainty. The second type, a cross-border listing, is a firm-level liberalization that has no uncertainty. Consistent with theoretical predictions, we find that the deterministic cross-listing results in an immediate but short-lived increase in capital inflows. In contrast, the uncertain reduction in capital controls results in increased inflows only over a longer horizon, if at all.

Subfields: Accounting, Finance

View Paper: https://www.semanticscholar.org/paper/f3030223c76798a8182ff6821d2d9eaec319e0de

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Citations in the corpus

Emerging Markets Finance (2003, background): “…is a growing body of research that studies the joint dynamics of capital flows and equity returns (see, for example, Warther, 1995; Choe et al., 1999; Froot et al., 2001; Clark and Berko, 1997; Edelen and Warner, 2001; Stulz, 1999; Edison and Warnock, 2001; Richards, 2002; Griffin et al., 2002).”
The Role of American Depositary Receipts in the Development of Emerging Equity Markets (2004, methodology): “7 Edison and Warnock (2003c) show that when an emerging-market firm lists on a major U.S. exchange, it has a statistically significant, though transitory, impact on cross-border capital flows.”
Stock market development and internationalization: Do economic fundamentals spur both similarly? (2006, background): “We also control for the extent of financial openness as that has been found to affect local stock market development (Bekaert and Harvey, 2000, 2003; Edison and Warnock, 2003a; Henry, 2000; Kim and Singal, 2000; Levine and Zervos, 1998).”
Are Daily Cross-Border Equity Flows Pushed or Pulled? (2004, unknown): “7 To control for capital inflows due to abnormal reasons as suggested by Edison and Warnock (2003), we set observations above the 99th percentile of the daily net flow distribution equal to the 99th percentile point.”
Does Capital Account Liberalization Lead To Growth (2008, background): “) Recent studies have examined capital account openness in terms of financial development (Chinn and Ito 2006; Henry 2000; Klein and Olivei 1999); growth volatility (BHL 2006); foreign direct investment and cross-border capital flows (Baker, Foley, and Wurgler 2004; Desai, Foley, and Hines 2006; Edi”