Capital markets: Access and denial.

摘要

Integration of world capital markets has generated abundant academic interest in several aspects of their functioning. This dissertation attempts to make a contribution to the literature on international finance by addressing two key issues concerning capital markets in developing countries. First, it tries to explain how emerging market economies could improve their reputation as borrowers in international financial markets. Second, it provides an empirical study of the growth impact of liberalization policies developing countries can pursue in freeing their capital markets.; Beginning with introductory remarks in the first chapter, the dissertation goes on to provide a brief overview of global markets in the second chapter. Several key issues affecting capital markets over the last century are discussed. The chapter succinctly discusses controls imposed to restrict the free flow of capital as well as financial crises that affect countries with a weak financial architecture.; The third chapter presents a historical empirical analysis of the factors responsible for better access to financial markets by sovereign borrowers, particularly India. A borrower's reputation is influenced by prior default behavior on loans. Sovereign borrowers could restore credibility in international markets by adhering to the gold standard. Additionally being part of an empire further improved credibility. The results obtained by estimating a Capital Asset Pricing Model suggest that there was no greater force than India's colonial status that can explain the favored treatment that Indian government debt received in London.; The final chapter examines the capital market liberalization policy decision faced by most emerging market, developing and transition economies. These nations are faced with the option to completely liberalize their capital accounts, liberalize only their equity markets or maintain controls on the free flow of capital. The chapter seeks to study the growth effects of these different options. Empirical growth regressions are estimated to determine the type of liberalization developing countries should pursue. The results confirm repeated policy recommendations that liberalizing equity markets should be a priority for developing countries.