Claessens, StijnKlingebiel, DanielaSchmukler, Sergio L.2013-08-062013-08-062002-03https://hdl.handle.net/10986/14814The authors study the determinants of the growing migration of stock market activity to international financial centers. They use a sample of 77 countries and document that higher economic growth and more macroeconomic stability help stock market development. Countries with higher income per capita, sounder macroeconomic policies, more efficient legal systems, better shareholder protection, and more open financial markets tend to have larger and more liquid stock markets. The authors show that these factors also drive the degree with which capital raising, listing, and trading have been migrating to international financial centers. As fundamentals improve and technology advances, this migration will likely increase and domestic stock market activity may become too little to support local markets. For many emerging economies, the best policy is to establish sound fundamentals but not necessarily the trading, or even listing of securities locally.en-USCC BY 3.0 IGOACCOUNTINGACCOUNTING FRAMEWORKADVERSE CONSEQUENCESBIDBONDSBORROWING COSTSCAPITAL FLOWSCAPITAL MARKETSCAPITALIZATIONCONSOLIDATIONCOST OF CAPITALDEBTDIVIDENDSDOMESTIC MARKETEMERGING MARKETSEXCHANGE RATESFINANCIAL MARKETSFINANCIAL REFORMFINANCIAL SECTORFINANCIAL SYSTEMSFOREIGN CURRENCYFOREIGN DIRECT INVESTMENTFOREIGN FIRMSFOREIGN INVESTORSFOREIGN OWNERSHIPGDPGDP PER CAPITAGROSS DOMESTIC PRODUCTINCOMEINFLATIONINFLATION RATEINTEREST RATESINTERNATIONAL BANKSINTERNATIONAL MARKETSINTERNATIONALFIRMSINVESTMENT BANKINGINVESTMENT BANKSLIQUIDITYLOCAL CAPITAL MARKETSMACROECONOMIC PERFORMANCEMACROECONOMIC POLICIESMACROECONOMIC STABILITYMACROECONOMICSMERGERSMIGRATIONNASDAQNYSEOFFERINGSPRICE INCREASESPRIVATIZATIONRESOURCE MOBILIZATIONSETTLEMENT SYSTEMSSPREADSTOCKSTRANSITION ECONOMIESTURNOVERUNDERESTIMATESVALUATIONVOLATILITYWEALTH STOCK MARKETSEMERGING ECONOMIESINTERNATIONAL MARKETSINTERNATIONAL FINANCIAL INSTITUTIONSTRADINGECONOMIC GROWTHMACROECONOMIC STABILITYPER CAPITA INCOMEMACROECONOMIC POLICYLEGAL SYSTEMSSHAREHOLDING STRUCTURECAPITAL TRANSACTIONSCAPITAL MOBILIZATIONCAPITAL FLOWSWorld Bank10.1596/1813-9450-2816