Financial openness & institutions in developing countries

Research in International Business and Finance, 2018, vol. 46, issue C, 240-250

Abstract: The paper examines for foreign portfolio investment recent result that foreign direct investment has positive effect on institutions in developing countries. Promise of firms to improve governance (in order to raise funds from outsiders) is more credible if they cross-list on the U.S. stock exchange. Stringent disclosures required by the U.S. are available to domestic regulators who become under pressure to follow global standards. Using 48 developing countries, I show greater openness of stock and bonds markets leads to better quality relevant institutions. I use both a natural experiment, viz. 2008 financial crisis outflows, and 2SLS/IV estimation to examine the endogeniety issues.

Keywords: Foreign portfolio investment; Cross-listing; Disclosures; Natural experiment (search for similar items in EconPapers)
JEL-codes: F63 F65 O43 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0275531917304397
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:46:y:2018:i:c:p:240-250

DOI: 10.1016/j.ribaf.2018.03.001

Access Statistics for this article

Research in International Business and Finance is currently edited by T. Lagoarde Segot

More articles in Research in International Business and Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().