Publication: The Impact of Contractual Savings Institutions on Securities Markets
Date
2003-01
ISSN
Published
2003-01
Author(s)
Impavido, Gregorio
Musalem, Alberto R.
Tressel, Thierry
Abstract
The authors assess empirically the
impact of contractual savings institutions portfolios
(pension funds and life insurance companies) on securities
markets, for example, depth and liquidity in the domestic
stock market, and depth in the domestic bond market. They
discuss how the institutionalization of savings can modify
financial markets through the lengthening of
securities' maturities. The results are the following:
1) An increase in assets of contractual savings institutions
relative to domestic financial assets has a positive impact
on the depth of stock and bond markets on average. 2) The
impact on stock market depth and liquidity is nonlinear: it
is stronger in countries where corporate information is more
transparent. 3) There is evidence of a significant
heterogeneity among countries: contractual savings have a
stronger impact on securities markets in countries where the
financial system is market based, pension fund contributions
are mandatory, and international transactions in securities
are lower. 4) The authors do not find that the impact of
contractual savings institutions on securities markets is
explained by the overall level of development, education,
demographic structure or the legal environment.
Link to Data Set
Citation
“Impavido, Gregorio; Musalem, Alberto R.; Tressel, Thierry. 2003. The Impact of Contractual Savings Institutions on Securities Markets. Policy Research Working Paper;No. 2948. © World Bank, Washington, DC. http://hdl.handle.net/10986/19174 License: CC BY 3.0 IGO.”
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