Cross-border listings, capital controls, and equity flows to emerging markets

Description

"We analyze capital flows to emerging markets in a framework that incorporates two quantitative measures of financial integration, the intensity of capital controls and the extent of cross-border listings, while controlling for traditional global (push) and country-specific (pull) factors. Two important results emerge. First, the cross-listing of an emerging market firm on a U.S. exchange is an important but short-lived capital flows event, suggesting that the cross-listed stock is in effect a new security that U.S. investors quickly bring into their portfolios. Second, the effect of financial liberalization on capital flows is more nuanced than is suggested by event studies: A reduction in capital controls results in increased inflows only when the controls were binding. Among the standard push and pull factors, global factors are important---slack U.S. economic activity is associated with increased flows to emerging markets---and U.S. investors appear to chase expected, but not past, returns"--Federal Reserve Board web site.

Subjects

Series Statement

• NBER working paper series -- no. 12589.
• Working paper series (National Bureau of Economic Research) -- working paper no. 12589.

Links

• URL

Other Editions

• Cross-border listings, capital controls, and equity flows to emerging marketsNational Bureau of Economic Research2006-01-01
• Cross border listings, capital controls, and equity flows to emerging markets.International Monetary Fund, Research Department2003-01-01
• Cross-border listings, capital controls, and equity flows to emerging marketsElectronic resourceFederal Reserve Board2003-01-01