Development Of Domestic Market Research Articles

Stock market development and economic growth in West African Economic and Monetary Union

This paper investigates the relationship between the development of the West African Economic and Monetary Union (WAEMU) stock market and economic performance. Stock market development indicators were identified and used to calculate the WAEMU stock market development index. The only companies quoted in Abidjan regional stock market were used to determine gross domestic product (GDP) which is the index of Burkinabe and Ivorian economies performance. A set of control variables were also identified. Empirical results suggest that the gross domestic product and stock market development are co-integrated when the control variables are included in the analysis; that is, there is a long-term relationship between these variables taken together. In addition, there is a unidirectional causality between stock market development and economic growth.

The Evolutionary Pattern of Global Imbalance: Evidence from Cross Country Data from 1970 to 2010

In this article, we emphasize that net foreign asset (NFA) is an important indicator that can nicely reflect global imbalance and has not received enough attention. We use a representative data-set to examine how the NFA varies with the development stages of different countries. We also investigate the determinants of NFA and the composition of external asset and liability. We have obtained some important findings. First, the change of NFA follows an inverse U-shaped curve with the increase of gross domestic product (GDP) per capita. This means that the most-watched global imbalance may decrease with economic development in the future. Second, industrial structure, openness to international market, inflation, development of domestic financial market and public debt are important factors that affect the ratio of NFA/GDP and compositions of external asset and liability. Third, the NFA/GDP ratio in China is currently at the early stage of the inverse U-shaped curve and is expected to decrease in the future. As for the compositions of external asset and liability, China is holding too much asset in the form of foreign exchange reserves (FER) and too much liability in the form of foreign direct investment (FDI). In contrast to some existing views, we believe that the restrictions on capital mobility, rather than NFA, affect the composition of external asset and liability. This study sheds some light on the imbalance issue and the corresponding policy-making.

Overseas listing as a policy tool: Evidence from China’s H-shares

We investigate why the Chinese government chooses to perform share issue privatization (SIP) of its state-owned enterprises (SOEs) in Hong Kong, despite the benefit of facilitating the domestic stock market development if performing SIP in China (Subrahmanyam and Titman, 1999) and the higher cost to list in Hong Kong. We address this issue by arguing that the positive effect of SIPs on the development of the domestic market may have limitations, especially when the domestic market is not well developed and cannot absorb rapid and large-scale SIP activities. To maintain domestic market order, it may be optimal to carry out SIP in overseas markets. Furthermore, by listing shares in developed overseas markets, SOEs from the less developed countries could leverage on the overseas markets’ better accounting, governance, and legal standards. By examining a sample of 92 Chinese firms listed in Hong Kong and the relevant control samples of purely domestically listed Chinese firms during the period of 1993–2006, we find supporting evidence for both arguments.

Who Issues Debt Securities in Emerging Countries?

This paper focuses on the differences of capital market accessibility and investigates the determinants of firm debt securities issuance in emerging countries. The following results are derived from the empirical analysis. First, country panel analyses show that the debt securities market development and domestic equity market development are positively related. Second, firm panel data analyses of ASEAN countries suggest that debt securities issuers and frequent equity issuers overlap. Third, analyses of daily stock price data of ASEAN firms reveal that debt securities are not issued for infrequent equity issuers, regardless of the stock price, whereas frequent equity issuers choose debt securities issuance as a funding tool when the stock price is low. Fourth, as compared to accessible frequent equity issuers, market-inaccessible firms are less sensitive to the financial cost of debt securities issuance.

The trend of development of domestic air travel market in the context of Ukraine's accession to the Single European Sky

The trend of development of domestic air travel market in the context of Ukraine's accession to the Single European Sky

How national and international financial development affect industrial R&D

We examine the impacts of both domestic and international financial market development on R&D intensities in 22 manufacturing industries in 18 OECD countries for the period 1990–2003. We take account of such industry characteristics as the need for external financing and the amount of tangible assets. Multiple forms of domestic financial development are important determinants of R&D intensity but only foreign direct investment is significant among alternative measures of international financial development. We find the strongest effects for private bond-market capitalization, while FDI, private credit by banks, and stock-market capitalization have similar effects in terms of magnitude.

How National and International Financial Development Affect Industrial R&D

We examine the impacts of both domestic and international financial market development on R&D intensities in 22 manufacturing industries in 18 OECD countries for the period 1990-2003. We take account of such industry characteristics as the need for external financing and the amount of tangible assets. Multiple forms of domestic financial development are important determinants of R&D intensity but only foreign direct investment is significant among alternative measures of international financial development. We find the strongest effects for private bond-market capitalization, while FDI, private credit by banks, and stock-market capitalization have similar effects in terms of magnitude.

Who Issues Debt Securities in Emerging Countries?

This paper focuses on the differences of capital market accessibility and investigates the determinants of firm debt securities issuance in emerging countries. The following results are derived from the empirical analysis. First, country panel analyses showed that the debt securities market development and domestic equity market development were positively related. Second, firm panel data analyses of ASEAN countries suggest that debt securities issuers and frequent equity issuers overlap. Third, analyses of daily stock price data of ASEAN firms reveal that debt securities are not issued for infrequent equity issuers, regardless of the stock price, whereas frequent equity issuers choose debt securities issuance as a funding tool when the stock price is low. Fourth, as compared to accessible frequent equity issuers, market-inaccessible firms are less sensitive to the financial cost of debt securities issuance.

Managing Public Debt-Formulating Strategies and Strengthening Institutional Capacity

In May 2007, the IMF and World Bank Boards discussed the paper "Strengthening Debt Management Practices: Lessons from Country Experiences and Issues Going Forward". In those discussions, the Boards of both institutions endorsed a public debt management (PDM) work program that was particularly focused on strengthening frameworks and capacity in low-income countries (LICs). This comprised three main elements: (i) develop a toolkit to help LICs formulate an effective Medium-Term Debt Management Strategy (MTDS) and apply it in 4–6 countries a year; (ii) undertake debt management performance assessments; and (iii) continue the provision of debt management and domestic market development technical assistance (TA) and advisory services to middle-income countries (MICs). This paper is a response to the Boards' request for an update on the development and implementation of that work program. Developing a Medium-Term Debt Management Strategy (MTDS)— Guidance Note for Country Authorities Debt Management Performance Assessment Tool (DEMPA) Developing a Medium Term Debt Management Strategy: User Guide and Analytical Tool — In March 2009, the Executive Boards of the World Bank and the IMF endorsed the Medium Term Debt Management Strategy (MTDS) Framework developed by IMF and World Bank staff to help countries elaborate effective debt management strategies. The MTDS framework and toolkit comprises two elements: An operational guidance note (GN) and a spreadsheet-based analytical tool (AT). The GN provides practical guidance on the process of developing an effective MTDS, describing each step involved, while the AT provides quantitative analysis to guide the MTDS decision-making process.

Ten Lessons on Debt Market Development

Recent financial crises, such as in East Asia in the late 1990s, in Latin America during the 1980s, in Mexico in 1994, and in Russia in 1998, have led to recognition, by both policy makers and academics, of the importance of a sound domestic debt market in supporting financial and economic growth and stability. The current global financial crisis has reinforced this view. This note aims to share ten lessons on domestic debt market development based on personal experience with such development over 17 years.

Regional Integration of Capital Markets in ASEAN

Efforts to promote regional economic cooperation and integration in South-East Asia and particularly in the Association of South-East Asian Nations (ASEAN) countries, have received greatly increased emphasis in official circles since the Asian crisis of 1997–98. South-East Asian financial integration with the world is well advanced by various measures; but they appear to have become more integrated with countries outside the region than within the region. Regional integration of private capital markets have shown limited progress. This was caused by several factors, including: (i) the large differences in the levels of market development; (ii) the lack of convergence of regulations and rules governing markets; (iii) differences in the extent to which the measures, to enable and benefit from greater regional integration, are incorporated into their national development plans; (iv) prevalence of exchange restrictions and intra-regional exchange stability considerations that hinder integration; and finally (v) the missing markets, in derivatives or in key regionally-focused products, hinder both domestic market development and regional integration. These considerations call for a comprehensive strategy which includes liberalising capital account and portfolio restrictions, implementing a process of mutual recognition of various cross-border transactions in products and services, supported by harmonisation of relevant rules and regulations. This also includes strengthening and coordinating exchange governance and market surveillance arrangements, initiating work on an ‘ASEAN Equity Network’ to link equity markets. This facilitates implementation of the ongoing bond market integration initiatives, promoting new products and intermediaries to develop ASEAN as an asset class. It refines plans for domestic capital markets development to incorporate regional integration objectives and establishes stronger coordination arrangements at the ASEAN level to support the initiatives in the above areas.

Recovering the Good Earth: China’s Growing Organic Market

People whose impressions of Chinese food exports are colored by reports of contaminated pet food or pesticide-laced dumplings might not expect China to have much of an organic market. They would be wrong. According to “The Greening of China’s Food: Green Food, Organic Food, and Eco-labelling,” a paper presented at the May 2008 Sustainable Consumption and Alternative Agri-Food Systems Conference, 28% of China’s arable land—just over 34 million hectares—is devoted to “eco-foods,” a designation that includes organic certification as well as China’s unique “green” and “hazard-free” categories of food. In an increasingly global food market, unexpected opportunities for farmers around the world are opening in unlikely places, such as China’s experiments with organic food. The world market for organic foods has soared, with sales growing by more than US$5 billion annually and doubling between 2000 and 2006, according to the International Federation of Organic Agriculture Movements (IFOAM), an umbrella organization based in Bonn, Germany. That international trend explains why China and other countries—despite relatively little domestic demand for organic food—have become big players in the organic market. Organic farming in China is largely an export-oriented industry, with the main products for both export and import being cereals, soybeans, and tea, followed by some vegetables, fruits and meat. Yet, although China has instituted several eco-food certification systems, reports of lax inspections persist. “Regulation is an imperfect substitute for the accountability, and trust, built into a market in which food producers meet the gaze of eaters and vice versa,” author Michael Pollan writes in his 2008 book In Defense of Food: An Eater’s Manifesto. In situations where farmers and consumers can’t meet face-to-face at the farmer’s market, however, some form of inspection is all that’s left to serve the interest of public health. How, then, is China adapting to secure the safety of its exports and the health of its own citizens?

Use of derivatives for debt management and domestic debt market development

The Ninth OECD/World Bank/IMF Annual Global Bond Market Forum held on 22-23 May 2007 in Paris, France, highlighted that there has been very sharp growth in the use of derivative instruments in both mature and emerging market countries. The use of derivative instruments is helping public debt managers in their portfolio management operations and in supporting market development. Several institutional and structural impediments, however, remain toward the more active use of derivative products. Most developed market debt managers use derivative instruments for debt management purposes, while this is the case for only a handful of emerging markets. Several emerging markets, though, are taking steps towards developing the legal environment necessary to support derivative markets, and are addressing the challenges posed by illiquidity of the underlying cash market, deficiencies in prudential regulation, and restrictions on market participation.

Why Would Chinese Firms List Overseas?

We investigate why the Chinese government chooses to share-issue privatize (SIP) its state-owned enterprises (SOEs) in Hong Kong instead of in Mainland China despite the benefit of facilitating domestic stock market development if SIP in China (Subrahmanyam and Titman, 1999) and the higher cost to list in Hong Kong. We address the puzzle by arguing that the positive effect of SIPs on the development of the domestic market may have a limit, especially when the domestic market is not well developed and cannot absorb rapid and large-scale SIP activities. To maintain the domestic market order, it may be optimal to carry out a SIP in overseas markets. Furthermore, by listing shares in more developed overseas markets, SOEs from the less developed domestic market effectively bond with the overseas markets and leverage on their better accounting, governance, and legal standards. By examining a sample of 53 Chinese firms listed in Hong Kong and a control sample of 663 purely domestically-listed Chinese firms during the period 1993-2002, we find supporting evidence for both arguments.

Impact of Macroeconomic, Political, and Institutional Factorson the Structure of Government Debt in Emerging Market Countries

Debt crises that have shaken Latin America, Asia, and Russia have brought an increasing attention to the structure of debt in emerging market countries. Using the newly released Jeanne-Guscina EM Government Debt Database 2006 this paper empirically explores the role of macroeconomic, political, and institutional factors in determining the structure of government debt. Results show that unstable macroeconomic environment, poor quality institutions, and uncertain political climate hinder the development of domestic debt market. Moreover, such instability shifts the debt structure away from long-term local currency fixed rate debt towards short-term debt or to debt indexed to foreign currency, short-term interest rates or inflation. Original sin seems to be on the way out, as more and more countries are issuing local currency debt at longer maturities-which can be explained by successful macroeconomic stabilization policies and lessons learned from the debt crises.

Impact of Macroeconomic, Political, and Institutional Factors on the Structure of Government Debt in Emerging Market Countries

Debt crises that have shaken Latin America, Asia, and Russia have brought an increasing attention to the structure of debt in emerging market countries. Using the newly released Jeanne-Guscina EM Government Debt Database 2006 this paper empirically explores the role of macroeconomic, political, and institutional factors in determining the structure of government debt. Results show that unstable macroeconomic environment, poor quality institutions, and uncertain political climate hinder the development of domestic debt market. Moreover, such instability shifts the debt structure away from long-term local currency fixed rate debt towards short-term debt or to debt indexed to foreign currency, short-term interest rates or inflation. Original sin seems to be on the way out, as more and more countries are issuing local currency debt at longer maturities-which can be explained by successful macroeconomic stabilization policies and lessons learned from the debt crises.

Domestic Bond Market Development: The Arirang Bond Experience in Korea

This study contrasts the development of the Republic of Korea’s market for won-denominated foreign bonds (Arirang) with similar markets in the Asia-Pacific region. It discusses the problems, concerns, and key issues related to the development of this market within the broader context of domestic, regional, and global bond market development. Korea’s experience provides valuable lessons for other emerging market economies also seeking to build bond markets for local and foreign issuers. The sophistication of the local bond market is not enough to make it appealing to foreign borrowers. Market development demands ensuring an enabling infrastructure and a background of macroeconomic stability, nurturing local and international demand, deregulating capital flows, and minimizing exchange restrictions.

Stock market development under globalization: Whither the gains from reforms?

Over the past decades, many countries have implemented significant reforms (including financial liberalization, privatization, and regulatory and supervisory improvements) to foster domestic capital market development. Despite these policies, the performance of capital markets in several countries has been disappointing. To understand the effects of reforms, we study the impact of six capital market reforms on domestic stock market development and internationalization. We find that reforms tend to be followed by increases in domestic market capitalization and trading. But reforms are also followed by an increase in the share of activity in international equity markets, with potential negative spillover effects.

The Nontradable Share Reform in the Chinese Stock Market

An unparalleled feature ownership structures in China is the presence of non tradable shares (NTS). NTS represented a major hurdle to domestic financial market development for its negative effects on liquidity and market transparency. After some failed attempts, in 2005 the Chinese authorities have launched a structural reform program aiming at eliminating NTS. In this paper, we evaluate the stock price effects of the actual implementation of this reform in 368 firms. The NTS reform generated a statistically significant 8 percent positive abnormal return over the event window, adjusting prices for the compensation requested by tradable shareholders. Results are consistent with the expectation of improved economic fundamentals such as better corporate governance and enhanced liquidity.

06/02068 Natural gas domestic market development for total elimination of routine flares in Nigeria's upstream petroleum operations: Sonibare, J. A. and Akeredolu, F. A. Energy Policy, 2006, 34, (6), 743–753.

06/02068 Natural gas domestic market development for total elimination of routine flares in Nigeria's upstream petroleum operations: Sonibare, J. A. and Akeredolu, F. A. Energy Policy, 2006, 34, (6), 743–753.