Home About Latest Browse RSS Advanced Search

Board of Governors of the Federal Reserve System (U.S.)
International Finance Discussion Papers
Cross-board listings, capital controls, and equity flows to emerging markets
Hali J. Edison
Francis E. Warnock
Abstract

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.


Download Full text
Download Full text
Cite this item
Hali J. Edison & Francis E. Warnock, Cross-board listings, capital controls, and equity flows to emerging markets, Board of Governors of the Federal Reserve System (U.S.), International Finance Discussion Papers 770, 2003.
More from this series
JEL Classification:
Subject headings:
Keywords: Capital movements ; Developing countries
For corrections, contact Franz Osorio ()
Fed-in-Print is the central catalog of publications within the Federal Reserve System. It is managed and hosted by the Economic Research Division, Federal Reserve Bank of St. Louis.

Privacy Legal