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The Future of Stock Exchanges: Determinants and Prospects

Published online by Cambridge University Press:  17 February 2009

Stijn Claessens ,
Daniela Klingebiel  and
Sergio L. Schmukler
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Abstract

We study the determinants of stock market development and the growing migration of capital raising, listing, and trading activity to international exchanges. Economies with better fundamentals – better legal systems, greater macro stability – have larger and more liquid markets. As fundamentals improve, however, the degree of migration to international exchanges also increases. Corporations enjoy lower costs and more liquid shares. Consequently, fully-fledged local stock exchanges become less necessary for many economies. Migration can further lead to such a reduction in domestic activity that would render a local exchange unsustainable. Therefore, the functions and forms of stock exchanges in many economies need rethinking.

Type
Articles
Information
European Business Organization Law Review (EBOR) , Volume 3 , Issue 2 , June 2002 , pp. 403 - 438
Copyright
Copyright © T.M.C. Asser Press and the Authors 2002

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