Does Financial Liberalization Spur Growth?

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: NBB Working Paper ; No. 53

Classification and Topics

• Classification: Wirtschaft
• Subject: Finanzmarktregulierung ; Wirtschaftswachstum ; Makroökonometrie ; Welt

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bekaert, Geert ; Harvey, Campbell R. ; Lundblad, Christian
• Event: Veröffentlichung
• (who): National Bank of Belgium
• (where): Brussels
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/144267
• Last update: 10.03.2025, 11:45 AM CET