کراس لیست و توسعه بازار سهام بین المللی در اقتصادهای نوظهور

Why have emerging equity markets grown so rapidly since 1990? First, it is shown how international cross-listings can transform a segmented local equity market from an equilibrium of low liquidity and market capitalization to an integrated market with high liquidity and market capitalization by altering the incentives of companies and individuals to participate in the market. Second, benefits of international cross-listings for domestic stock market development and welfare across emerging equity markets are found to be negatively related to both the degree of correlation between the domestic and world equity market and the relative size of the domestic equity market. Third, the price impact of international listing is shown to depend on the liquidity conditions in the domestic market prior to listing.

International cross-listings have become increasingly popular for Latin American companies in recent years, with the number of cross-listings increasing from just 2 in 1989 to 106 by January 1999.1 Companies perceive that listing their stock in foreign markets will increase the value of the firm and enhance the liquidity of the underlying stock. Foerster and Karolyi (1998) find empirical support for these perceptions, namely that cross-listing increases firm value by expanding the shareholder base and improving liquidity. Policy makers, however, fear that globalization of trading and issuance of equity from emerging economies will inhibit domestic stock market development. Cross-listing could divert order flow to the foreign market, reducing domestic market liquidity. In contrast to these fears, the expansion of cross-listings in Latin America has been paralleled by their rapid development, with market capitalization increasing from $66 billion to $434 billion between 1990 and 1996 (See Table 1). The growing participation by foreign investors in these markets is reflected in the explosive growth of private portfolio equity flows to emerging markets which reached $45.7 in 1996, surpassing the previous record of $45.0 billion in 1993 and up from $3.2 billion in 1990.2 Table 1. Evolution of Latin American equity markets, 1989–1996a 1990 1991 1992 1993 1994 1995 1996 A. Market capitalization Latin America 65,992 187,430 232,599 388,690 424,586 349,973 434,149 Argentina 3,268 18,509 18,633 43,967 36,864 37,783 44,679 Brazil 16,354 42,759 45,261 99,430 189,281 147,636 216,990 Chile 13,645 27,984 29,644 44,622 68,195 73,860 65,940 Mexico 32,725 98,178 139,061 200,671 130,246 90,694 106,540 B. Value traded and turnover Latin America 22,114 65,511 109,831 178,895 312,699 210,908 245,211 Domestic trading value 19,445 51,820 82,815 132,998 209,097 129,229 167,990 U.S. trading valueb 2,669 13,691 27,016 45,897 103,602 81,679 77,221 Turnover ratio (%) 33.5 34.9 47.2 46.0 73.6 60.3 56.4 Argentina 852 4,824 15,679 16,464 23,984 20,273 16,827 Domestic trading value 852 4,824 15,679 10,339 11,372 4,594 4,382 U.S. trading value 0 0 0 6,125 12,612 15,679 12,445 Turnover ratio (%) 26.1 26.0 84.4 37.4 65.0 53.6 37.7 Brazil 5,598 13,373 20,674 57,505 109,782 82,470 137,909 Domestic trading value 5,598 13,373 20,525 57,409 109,498 79,186 112,108 U.S. trading value 0 0 149 96 284 3,284 25,801 Turnover ratio (%) 34.2 31.2 45.3 57.8 58.0 55.9 63.2 Chile 875 2,093 2,635 5,165 12,473 22,672 18,044 Domestic trading value 783 1,900 2,029 2,796 5,263 11,072 8,460 U.S. trading value 92 193 606 2,369 7,210 11,600 9,584 Turnover ratio (%) 6.4 7.5 8.9 11.6 18.3 30.7 27.3 Mexico 14,789 45,221 70,843 99,761 166,460 88,777 72,431 Domestic trading value 12,212 31,723 44,582 62,454 82,964 34,377 43,040 U.S. trading value 2,577 13,498 26,261 37,307 83,496 54,400 29,391 Turnover ratio (%) 45.2 46.1 50.9 49.7 127.8 97.9 67.9 a Currency amounts in millions of dollars, end of period. b Value traded in the domestic market includes all companies. Value traded in the United States includes only equities traded on a major exchange (NYSE, NASDAQ and AMEX). U.S. trading in 1996 is for the NYSE. Table options The internationalization of emerging stock markets has occurred as a result of various forms of foreign investment liberalization. Investment liberalizations have taken the form of closed-end country funds, American Depositary Receipts (ADRs) and the elimination of foreign investment restrictions for domestic stocks. Before 1991, closed-end country and regional funds were the main vehicle for participation by foreigners in Latin American stock markets. Between 1991 and 1993, international share offerings, usually in the form of ADRs, became the major source of equity flows.3 Since 1993, the importance of flows into the domestic equity market has increased. The extent of foreign participation in Latin American stock markets is illustrated by the fact that by March 1995, over 87%, 54%, 62% and 71% of the Mexican, Argentine, Chilean, and Brazilian local market indices, respectively, were available for trading in the United States in the form of ADRs. The value of Mexican, Argentine, and Chilean ADRs traded in the United States were each greater than the total value traded for all stocks in their respective domestic markets during 1995, with all four countries ranked in the top nine on the New York Stock Exchange in terms of value traded of foreign equities for 1996.4 This article claims that international cross-listings have been instrumental in the development of stock markets in Latin America since 1989, increasing stock prices and issuance of equity and enhancing liquidity. The article has four contributions. First, it examines the impact of participation externalities5 on financial market development and demonstrates how international cross-listing can increase the market capitalization and liquidity of a local equity market by reducing the segmentation of markets due to investment barriers.6 Internationalization improves the allocation of investment by lowering the required rate of return on equity and reducing volatility due to lack of liquidity in the market. Second, the benefits of internationalization for domestic stock market development and welfare across emerging equity markets are shown to be negatively related to the both the degree of correlation between the domestic and international equity market and the relative size of the domestic equity market. Prior studies have investigated the impact of integration on welfare (Errunza & Losq, 1989) and asset pricing. The focus here is the impact of integration on domestic equity market development. Third, the price impact of international listing is shown to depend on the liquidity of the domestic market prior to listing, extending previous models Alexander, Eun, & Janakirmanan 1986 and Eun, Claessens, & Jun 1995. The article is organized as follows. First, the role of participation externalities in stock market development is discussed along with the benefits of international cross-listing. Second, the proposed model for the impact of cross-listing on the development of the local stock exchange is presented. Third, empirical evidence in support the model is given for Latin American equity markets since 1990.

Policy makers are concerned that the globalization of trading and issuance of equities from emerging markets will inhibit the development of the domestic market. This article provides a theoretical model and provides supporting empirical evidence that integration of emerging stock markets is beneficial for domestic stock market development. Integration increases domestic prices by enhancing the ability of the domestic stock market to provide the diversification and liquidity roles of the market.