Download or read book Trade Misallocation and Capital Market Integration written by Laszlo Tetenyi and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: I study how cross-country capital market integration affects the gains from trade in a model with financial frictions and heterogeneous, forward-looking firms. The model predicts that misallocation among exporters increases as trade barriers fall, even as misallocation decreases in the aggregate. The reason is that financially constrained productive exporters increase their production only marginally, while unproductive exporters survive for longer and increase their size. Allowing capital inflows magnifies misallocation, because unproductive firms expand even more, leading to a decline in aggregate productivity. Nevertheless, under integrated capital markets, access to cheaper capital dominates the adverse effect on productivity, leading to higher output, consumption and welfare than under closed capital markets. Applied to the period of European integration between 1992 and 2008, I find that underdeveloped sectors experiencing higher export exposure had more misallocation of capital and a higher share of unproductive firms, thus the data is consistent with the model’s predictions. A key implication of the model is that TFP is a poor proxy for consumption growth after trade liberalisation.

Download or read book Misallocation and Capital Market Integration written by Natalie Bau and published by . This book was released on 2020 with total page 65 pages. Available in PDF, EPUB and Kindle. Book excerpt: We show that foreign capital liberalization reduces capital misallocation and increases aggregate productivity using a natural experiment. The staggered liberalization of access to foreign capital across disaggregated Indian industries allows us to identify changes in firms' input wedges, overcoming major challenges in the measurement of the effects of changing misallocation. For domestic firms with initially high marginal revenue products of capital (MRPK)/high sales to capital ratios, liberalization increased revenues by 18%, physical capital by 60%, wage bills by 26%, and reduced the marginal revenue product of capital by 43% relative to low MRPK firms. There were no effects on firms with low MRPK. The effects of liberalization are largest in areas with less developed local banking sectors, indicating that foreign investors may substitute for an efficient banking sector. Finally, we develop a method to use natural experiments to estimate the lower bound effect of changes in misallocation on manufacturing productivity. We find that this liberalization episode increased the aggregate productivity of the Indian manufacturing sector by at least 6.5%.

Download or read book Achieving Market Integration written by Scott McCleskey and published by Butterworth-Heinemann. This book was released on 2004-01-02 with total page 184 pages. Available in PDF, EPUB and Kindle. Book excerpt: Providing an overview of the infrastructure of European Securities markets, this text offers topical analysis of developments and trends in market integration. The author provides industry professionals with a concise exposition of how the post-Euro market works, as well as offering laymen an entry point into the subject. Topics include: wholesale electronic execution; central counterpart clearing; and consolidation of the securities depositories.

Download or read book Understanding International Differences in Trade and Capital Market Integration written by Sebastian Claro and published by . This book was released on 2005 with total page 96 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Influence of Capital Market Integration on Production and Market Structures written by Michael J. Koop and published by . This book was released on 2001 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Understanding International Differences in Trade and Capital Market Integration written by Sebastián Claro Edwards and published by . This book was released on 2005 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Capital Market Integration and Industrial Structure written by Usha R. Mittoo and published by . This book was released on 2001 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a matched sample design where companies are matched by size and industry from Australian, Canadian and US capital markets, we investigate whether capital market integration varies across industries. The tests are conducted in the Capital Asset Pricing Model and multi-factor pricing frameworks over the 1983-1992 period. Our evidence supports two main findings. First, global industry stocks such as oil and mining stocks are priced in a relatively integrated capital market while regional industry stocks such as consumer and capital goods stocks are priced in segmented markets. Second, Australian stocks are priced in different markets than their Canadian and US counterparts. Evidence suggests that the pricing of Canadian stocks occurs in a regionally integrated North American stock market rather than in a global market. This evidence supports the notion that economic and trade linkages are a dominant factor in international asset pricing.

Download or read book Global Capital Market Integration written by and published by . This book was released on 2001 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The post-war period has seen a steady and sizable expansion of international economic integration. Trade in goods has grown rapidly, but trade in assets (e.g. bank accounts, stocks, bonds, and real property) has grown far faster. The rapid growth of international asset markets suggests that they confer important economic benefits. However, that growth also raises concerns about international capital flows as initiators or conduits of economic crisis among nations. Several factors have contributed to the rapid growth of international capital flows. The collapse of the Bretton Woods System of international monetary management also initiated a fairly quick abandonment of controls on international capital flows in most industrial countries. Expanding investment opportunities in both developed and developing nations raised the incentives for cross border investing. Innovations in communication and information technology have dramatically reduced the cost of international communication and expanded access to data for assessing risk and reward. Also of importance has been the creation of new financial instruments that improve investment decision making. The extent of capital market integration is evident in the huge increases in most financial realms over the last twenty years. These include bank deposits, securities (stocks and bonds) and foreign exchange. Foreign exchange transactions world-wide have grown so much that the value of annual foreign exchange trading exceeds the value of goods transactions by a factor of 50. Despite this growth data indicate that asset market integration still falls well short of creating one world market in assets. The economic benefits of international capital flows are significant. The presence of well functioning international asset markets can extend the benefit of international trade well beyond the gains associated with the exchange of goods and services. International capital markets can facilitate a more efficient allocation of saving and investment across nations, allowing an optimal spreading of consumption spending over time. International trade in assets can also enable greater diversification of investment portfolios, leading to reduced investor risk. In conjunction with flexible exchange rates, high capital mobility also enhances the power of monetary policy as well as alters how monetary forces are transmitted and distributed through the economy. Economists and policy makers have also long recognized that increased financial integration carries risks. One risk is that more points of economic and financial contact raise the prospect of the transmission of negative economic shocks, so called "contagion" effects. In addition, some argue that asset markets themselves are often destabilizing and can generate periodic crises. For the U.S. the main problem associated with mobile global capital has been occasional misalignment of the dollar exchange rate. For the U.S., a large, predominately domestically oriented economy, with a well developed financial system and a resilient structure of private markets, large international flows of capital are absorbed to economic advantage, with a minimum of disruption, even in the face of large currency swings.

Download or read book Financial Distortions in China written by Diego Anzoategui and published by International Monetary Fund. This book was released on 2015-12-24 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: Widespread implicit guarantees and interest ceilings were major distortions in China’s financial system, contributing to a misallocation of resources. We analyze the impact of removing such frictions in a general equilibrium setting. The results show that comprehensive reforms generate better outcomes than partial ones: removing the deposit rate ceiling alone increases output, but the efficiency of capital allocation does not improve. Removing implicit guarantees improves output through lower cost of capital for private companies and better resource allocation.

Download or read book Regaining Global Stability After the Financial Crisis written by Sergi, Bruno and published by IGI Global. This book was released on 2018-04-06 with total page 409 pages. Available in PDF, EPUB and Kindle. Book excerpt: The prosperity and stability of any economic structure is reliant upon a foundation of secure systems that regulate the movement of money across the globe. These structures have become an integral part of contemporary society by reducing monetary risk and increasing financial security. Regaining Global Stability After the Financial Crisis is a critical scholarly publication that examines the after-effects of the economic slowdown and the steps that have been taken to overcome the consequences of the slowdown as well as strategies to reduce its impact on economies and societies. Highlighting a wide range of topics including economic convergence, risk management, and public policy for financial stability, this book is geared toward academicians, practitioners, students, managers, and professionals in the financial sector seeking current research on regaining a sense of safety and security after a time of economic crisis.

Download or read book World Development Report 2020 written by World Bank and published by World Bank Publications. This book was released on 2019-11-19 with total page 511 pages. Available in PDF, EPUB and Kindle. Book excerpt: Global value chains (GVCs) powered the surge of international trade after 1990 and now account for almost half of all trade. This shift enabled an unprecedented economic convergence: poor countries grew rapidly and began to catch up with richer countries. Since the 2008 global financial crisis, however, the growth of trade has been sluggish and the expansion of GVCs has stalled. Meanwhile, serious threats have emerged to the model of trade-led growth. New technologies could draw production closer to the consumer and reduce the demand for labor. And trade conflicts among large countries could lead to a retrenchment or a segmentation of GVCs. World Development Report 2020: Trading for Development in the Age of Global Value Chains examines whether there is still a path to development through GVCs and trade. It concludes that technological change is, at this stage, more a boon than a curse. GVCs can continue to boost growth, create better jobs, and reduce poverty provided that developing countries implement deeper reforms to promote GVC participation; industrial countries pursue open, predictable policies; and all countries revive multilateral cooperation.

Download or read book Capital Market Liberalization and Development written by Joseph E. Stiglitz and published by Oxford University Press, USA. This book was released on 2008-05 with total page 388 pages. Available in PDF, EPUB and Kindle. Book excerpt: Capital market liberalization has been a key part of the ongoing debate on globalization. Bringing together leading researchers and practitioners in the field, this book provides a unique analysis of both the risks associated with capital market liberalization and the alternative policy options available to enhance macroeconomic management.

Download or read book China s Great Economic Transformation written by Loren Brandt and published by Cambridge University Press. This book was released on 2008-04-14 with total page 887 pages. Available in PDF, EPUB and Kindle. Book excerpt: This landmark study provides an integrated analysis of China's unexpected economic boom of the past three decades. The authors combine deep China expertise with broad disciplinary knowledge to explain China's remarkable combination of high-speed growth and deeply flawed institutions. Their work exposes the mechanisms underpinning the origin and expansion of China's great boom. Penetrating studies track the rise of Chinese capabilities in manufacturing and in research and development. The editors probe both achievements and weaknesses across many sectors, including China's fiscal, legal, and financial institutions. The book shows how an intricate minuet combining China's political system with sectorial development, globalization, resource transfers across geographic and economic space, and partial system reform delivered an astonishing and unprecedented growth spurt.

Download or read book Managing Capital Flows written by Masahiro Kawai and published by Edward Elgar Publishing. This book was released on 2010-01-01 with total page 465 pages. Available in PDF, EPUB and Kindle. Book excerpt: Managing Capital Flows provides analyses that can help policymakers develop a framework for managing capital flows that is consistent with prudent macroeconomic and financial sector stability. While capital inflows can provide emerging market economies with invaluable benefits in pursuing economic development and growth, they can also pose serious policy challenges for macroeconomic management and financial sector supervision. The expert contributors cover a wide range of issues related to managing capital flows and analyze the experience of emerging Asian economies in dealing with surges in capital inflows. They also discuss possible policy measures to manage capital flows while remaining consistent with the goals of macroeconomic and financial sector stability. Building on this analysis, the book presents options for workable national policies and regional policy cooperation, particularly in exchange rate management. Containing chapters that bring in international experiences relevant to Asia and other emerging market economies, this insightful book will appeal to policymakers in governments and financial institutions, as well as public and private finance experts. It will also be of great interest to advanced students and academic researchers in finance.

Download or read book Financial Integration Entrepreneurial Risk and Global Dynamics written by George-Marios Angeletos and published by DIANE Publishing. This book was released on 2011-04 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: How does financial integration impact capital accumulation, current-account dynamics, and cross-country inequality? This paper investigates this question within a two-country, general-equilibrium, incomplete-markets model that focuses on the importance of idiosyncratic entrepreneurial risk -- a risk that introduces, not only a precautionary motive for saving, but also a wedge between the interest rate and the marginal product of capital. This friction provides a simple resolution to the empirical puzzle that capital often fails to flow from the rich or slow-growing countries to the poor or fast-growing ones, and a distinct set of policy lessons regarding the intertemporal costs and benefits of capital-account liberalization. Illus. A print on demand report.

Download or read book Short and Long run Integration written by Graciela Laura Kaminsky and published by World Bank Publications. This book was released on 2001 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: Do controls on capital flows persistently isolate domestic markets from international markets? Or is the insulation they provide just ephemeral?

Download or read book Barriers to Riches written by Stephen L. Parente and published by MIT Press. This book was released on 2002-01-25 with total page 188 pages. Available in PDF, EPUB and Kindle. Book excerpt: Why isn't the whole world as rich as the United States? Conventional views holds that differences in the share of output invested by countries account for this disparity. Not so, say Stephen Parente and Edward Prescott. In Barriers to Riches, Parente and Prescott argue that differences in Total Factor Productivity (TFP) explain this phenomenon. These differences exist because some countries erect barriers to the efficient use of readily available technology. The purpose of these barriers is to protect industry insiders with vested interests in current production processes from outside competition. Were this protection stopped, rapid TFP growth would follow in the poor countries, and the whole world would soon be rich. Barriers to Riches reflects a decade of research by the authors on this question. Like other books on the subject, it makes use of historical examples and industry studies to illuminate potential explanations for income differences. Unlike these other books, however, it uses aggregate data and general equilibrium models to evaluate the plausibility of alternative explanations. The result of this approach is the most complete and coherent treatment of the subject to date.