Enhancing the Efficiency of Securities Markets in East Asia
The authors explore the relative efficiency of stock markets across countries using newly available data on transactions costs and the quality of the informational environment of stock markets. These new measures are constructed from firm-level sto...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2007/02/7361429/enhancing-efficiency-securities-markets-east-asia http://hdl.handle.net/10986/7134 |
| Summary: | The authors explore the relative
efficiency of stock markets across countries using newly
available data on transactions costs and the quality of the
informational environment of stock markets. These new
measures are constructed from firm-level stock returns in a
panel of 60 countries for the period 2000-04. The authors
then develop a framework to understand the linkages between
efficiency, liquidity, and their determinants. To give
empirical content to the framework, they study the
determinants of transactions costs and the quality of the
informational environment. They find that some institutional
arrangements-such as the availability of stock lending and
short selling-and the openness of markets are associated
with lower transactions costs. The authors also find that,
although disclosure rules for directors and officers of
listed firms are essential, the ability of shareholders to
seek redress is more conducive to a better informational
environment in stock markets. This in turn serves as the
basis for the policy framework and recommendations for the
East Asian region. In particular, the region needs to
continue to strengthen the implementation and enforcement of
corporate governance, to further enhance the market and
institutional infrastructure, and focus on policy measures
to foster a larger and more diversified investor base to
continue to see gains in the efficiency of stock markets. |
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