Publication:
Financial Liberalization and Allocative Efficiency of Capital

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dc.contributor.authorKukenova, Madina
dc.date.accessioned2012-03-19T18:02:24Z
dc.date.available2012-03-19T18:02:24Z
dc.date.issued2011-05-01
dc.description.abstractFinancial liberalization may have a positive effect on growth not only through the increase in the quantity of the available funds, but also through a more efficient allocation of resources across firms and sectors. Despite this intuitive appeal, there is little empirical evidence on the positive effect of financial liberalization on capital allocation. The main difficulty of investigating the linkage between liberalization of financial markets and capital allocation efficiency lies in the fact that the efficiency of capital allocation is not directly observable. One way to address this issue is to evaluate the effect of financial liberalization within the Heckscher-Ohlin framework. Producing and exporting products inconsistent with a country's factor endowments constitutes a serious misallocation of the funds, which undermines competitiveness of the economy and inhibits its long run growth. This paper tests the allocative efficiency hypothesis by evaluating the effect of stock market liberalization on the survival of different product categories using export data for 91 countries over the period of 1975-2003. Preliminary results suggest that after liberalization of the domestic stock market, products employing intensively scarce factors exit at a relatively higher rate from a country's export portfolio. In other words, following liberalization episodes, a country tends to rebalance its export portfolio towards products consistent with its factor's endowments.en
dc.identifierhttp://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110530053946
dc.identifier.doi10.1596/1813-9450-5670
dc.identifier.urihttps://hdl.handle.net/10986/3433
dc.languageEnglish
dc.relation.ispartofseriesPolicy Research working paper ; no. WPS 5670
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectACCOUNTING
dc.subjectAGENCY PROBLEM
dc.subjectALLOCATION OF CAPITAL
dc.subjectALLOCATION OF CREDIT
dc.subjectASSET PRICE
dc.subjectASYMMETRIC INFORMATION
dc.subjectBANK CREDIT
dc.subjectBANK ENTRY
dc.subjectBANK LENDING
dc.subjectBANKING CRISES
dc.subjectBANKING CRISIS
dc.subjectBANKING SECTOR
dc.subjectBANKING SECTOR DEVELOPMENT
dc.subjectBANKING SECTORS
dc.subjectBANKING SYSTEM
dc.subjectBARRIER
dc.subjectBARRIER TO ENTRY
dc.subjectBEHAVIOR OF PRICES
dc.subjectBORROWING COSTS
dc.subjectBUSINESS CYCLE
dc.subjectBUSINESS ENVIRONMENT
dc.subjectBUSINESS REGULATION
dc.subjectCAPITAL ACCOUNT
dc.subjectCAPITAL ACCOUNT LIBERALIZATION
dc.subjectCAPITAL ACCOUNT LIBERALIZATIONS
dc.subjectCAPITAL ACCOUNT OPENNESS
dc.subjectCAPITAL ALLOCATION
dc.subjectCAPITAL CONTROLS
dc.subjectCAPITAL GOODS
dc.subjectCAPITAL INTENSITY
dc.subjectCAPITAL MARKET
dc.subjectCAPITAL MARKET LIBERALIZATION
dc.subjectCENTRAL BANKS
dc.subjectCHECKS
dc.subjectCOMMODITY
dc.subjectCOMPARATIVE ADVANTAGE
dc.subjectCOMPARATIVE ADVANTAGES
dc.subjectCOMPETITIVENESS
dc.subjectCONTRACT ENFORCEMENT
dc.subjectCORPORATE GOVERNANCE
dc.subjectCOST OF CAPITAL
dc.subjectCREDIT AVAILABILITY
dc.subjectCREDIT MARKET
dc.subjectCURRENCY
dc.subjectCURRENCY CRISES
dc.subjectCURRENCY CRISIS
dc.subjectDATA AVAILABILITY
dc.subjectDEPENDENT VARIABLE
dc.subjectDEPENDENT VARIABLES
dc.subjectDEPOSIT
dc.subjectDEREGULATION
dc.subjectDEVALUATION
dc.subjectDEVELOPING COUNTRIES
dc.subjectDEVELOPMENT ECONOMICS
dc.subjectDEVELOPMENT POLICY
dc.subjectDOMESTIC BANK
dc.subjectDOMESTIC BANKING
dc.subjectDOMESTIC BANKING SECTOR
dc.subjectDOMESTIC CREDIT
dc.subjectDOMESTIC CURRENCY
dc.subjectDOMESTIC EQUITIES
dc.subjectDOMESTIC EQUITY
dc.subjectDOMESTIC SECURITIES
dc.subjectDOMESTIC STOCK
dc.subjectDOMESTIC STOCK MARKET
dc.subjectDUMMY VARIABLE
dc.subjectECONOMIC DEVELOPMENT
dc.subjectECONOMIC GROWTH
dc.subjectECONOMIC REFORM
dc.subjectECONOMIC RESEARCH
dc.subjectEMERGING MARKET
dc.subjectEMERGING MARKET EQUITY
dc.subjectENTRY BARRIERS
dc.subjectEQUITY MARKET
dc.subjectEQUITY MARKETS
dc.subjectEQUITY PRICES
dc.subjectESTIMATION STRATEGY
dc.subjectEXPLANATORY VARIABLES
dc.subjectEXPORT GROWTH
dc.subjectEXPORT MARKET
dc.subjectEXPORT MARKETS
dc.subjectEXPORT PERFORMANCE
dc.subjectEXPORT SHARE
dc.subjectEXPORT VOLUME
dc.subjectEXPORTER
dc.subjectEXPORTERS
dc.subjectEXPORTS
dc.subjectEXPOSURE
dc.subjectEXTERNAL ASSETS
dc.subjectEXTERNAL FINANCE
dc.subjectFACTORS OF PRODUCTION
dc.subjectFEDERAL RESERVE
dc.subjectFEDERAL RESERVE BANK
dc.subjectFINANCIAL DEVELOPMENT
dc.subjectFINANCIAL INSTITUTIONS
dc.subjectFINANCIAL INTERMEDIARIES
dc.subjectFINANCIAL LIBERALIZATION
dc.subjectFINANCIAL MARKETS
dc.subjectFINANCIAL OPENNESS
dc.subjectFINANCIAL STUDIES
dc.subjectFIXED EFFECT
dc.subjectFOREIGN ASSETS
dc.subjectFOREIGN BANK
dc.subjectFOREIGN INVESTORS
dc.subjectFOREIGN PORTFOLIO
dc.subjectGDP
dc.subjectGDP PER CAPITA
dc.subjectGLOBALIZATION
dc.subjectGOVERNMENT REGULATION
dc.subjectIMPORT
dc.subjectINCOME
dc.subjectINCREASING RETURNS
dc.subjectINCREASING RETURNS TO SCALE
dc.subjectINDICATOR VARIABLE
dc.subjectINSTITUTIONAL DEVELOPMENT
dc.subjectINTELLECTUAL PROPERTY
dc.subjectINTEREST RATE
dc.subjectINTERNATIONAL BANK
dc.subjectINTERNATIONAL CAPITAL
dc.subjectINTERNATIONAL CAPITAL MARKETS
dc.subjectINTERNATIONAL COMPETITION
dc.subjectINTERNATIONAL ECONOMICS
dc.subjectINTERNATIONAL TRADE
dc.subjectINVESTMENT ALLOCATION
dc.subjectINVISIBLE HAND
dc.subjectLABOR MARKET
dc.subjectLIBERALIZATION
dc.subjectLIBERALIZATIONS
dc.subjectLOANABLE FUNDS
dc.subjectMACROECONOMIC VOLATILITY
dc.subjectMARKET CONCENTRATION
dc.subjectMARKET DEVELOPMENT
dc.subjectMARKET EQUITY
dc.subjectMARKET INTEGRATION
dc.subjectMARKET LIQUIDITY
dc.subjectMARKET RESTRICTION
dc.subjectMARKET SHARE
dc.subjectMARKET SIZE
dc.subjectMARKET TURNOVER
dc.subjectMONETARY FUND
dc.subjectNET CAPITAL
dc.subjectOPEN ECONOMY
dc.subjectOUTPUT
dc.subjectPORTFOLIO
dc.subjectPORTFOLIO THEORY
dc.subjectPOVERTY REDUCTION
dc.subjectPRICE CONTROL
dc.subjectPRIVATE CREDIT
dc.subjectPRIVATE SECTOR CREDIT
dc.subjectPRODUCT MARKET
dc.subjectPRODUCT MARKETS
dc.subjectPRODUCTION COSTS
dc.subjectPROPERTY RIGHT
dc.subjectPROPERTY RIGHTS
dc.subjectRATE OF INVESTMENT
dc.subjectRECESSIONS
dc.subjectREFORM PROGRAMS
dc.subjectREGULATORY OVERSIGHT
dc.subjectRETURN
dc.subjectRETURNS
dc.subjectROBUSTNESS CHECK
dc.subjectROBUSTNESS CHECKS
dc.subjectRULE OF LAW
dc.subjectSECURITIES
dc.subjectSEMI-ELASTICITIES
dc.subjectSTOCK MARKET
dc.subjectSTOCK MARKET CAPITALIZATION
dc.subjectSTOCK MARKET DEVELOPMENT
dc.subjectSTOCK MARKETS
dc.subjectSTOCK PRICES
dc.subjectSUPPLIERS
dc.subjectSYSTEMIC CRISES
dc.subjectTOTAL EXPORT
dc.subjectTOTAL FACTOR PRODUCTIVITY
dc.subjectTRADE LIBERALIZATION
dc.subjectTRADE OPENNESS
dc.subjectTRADE POLICY
dc.subjectTRADE REFORMS
dc.subjectTRADING
dc.subjectTRANSACTION
dc.subjectTRANSMISSION MECHANISM
dc.subjectTRANSPARENCY
dc.subjectTRUST FUND
dc.subjectTURNOVER
dc.subjectVALUE ADDED
dc.subjectVOLATILITY
dc.subjectWEALTH
dc.subjectWEIGHTS
dc.subjectWORLD DEVELOPMENT INDICATOR
dc.titleFinancial Liberalization and Allocative Efficiency of Capitalen
dspace.entity.typePublication
okr.crossref.titleFinancial Liberalization and Allocative Efficiency of Capital
okr.date.disclosure2011-05-01
okr.date.doiregistration2025-04-10T11:26:58.347676Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110530053946
okr.guid569471468160767749
okr.identifier.doi10.1596/1813-9450-5670
okr.identifier.externaldocumentum000158349_20110530053946
okr.identifier.internaldocumentum14266171
okr.identifier.reportWPS5670
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2011/05/30/000158349_20110530053946/Rendered/PDF/WPS5670.pdfen
okr.region.administrativeThe World Region
okr.region.administrativeThe World Region
okr.unitDevelopment Research Group (DECRG)
okr.volume1 of 1
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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