Sakho, Yaye Seynabou2012-06-222012-06-222006-12https://hdl.handle.net/10986/8859The author investigates whether contagion matters when emerging market firms cross-list their stocks in a developed capital market. She develops a rational expectations model where financial markets are segmented along emerging markets' borders and contagion spreads from one emerging market to another through the actions of international investors rebalancing their portfolio using stocks cross-listed in the developed market. The author finds that contagion is a cost of internationalization as cross-listed stocks are more affected by contagion than pure domestic stocks. Furthermore, a welfare analysis of international cross-listing versus financial autarky suggests that the benefits of internationalization in terms of less information asymmetry and better market efficiency offset the costs of contagion. Her model is able to explain some transmission of the 1998 Brazilian crisis to Mexico and Chile.en-USCC BY 3.0 IGOASSETSASYMMETRIC INFORMATIONCAPITAL MARKETCAPITAL MARKETSCONTAGIONCRISIS AFFECTEDDEMAND CURVEDEMAND FUNCTIONSDOMESTIC MARKETEMERGING MARKETEMERGING MARKETSEQUILIBRIUMEQUILIBRIUM PRICESEXCESS DEMANDEXPECTED RETURNSEXTERNALITYFINANCIAL CRISESFINANCIAL INTERNATIONALIZATIONFINANCIAL MARKETFINANCIAL MARKETSFOREIGN INVESTORSFOREIGN OWNERSHIPFOREIGN SECURITIESFUTURE RESEARCHGLOBALIZATIONHEDGE FUNDSINFORMATION ASYMMETRYINSURANCEINTEREST RATEINTERNATIONAL CAPITAL MARKETINTERNATIONAL CAPITAL MARKETSINTERNATIONAL FIRMSINTERNATIONAL INVESTORSINVESTMENT BARRIERSLIQUIDATIONLIQUIDITYM1M2M3MACROECONOMIC POLICYMARKET INTEGRATIONMARKET PRICESMARKET SEGMENTATIONMARKET TRANSPARENCYMUTUAL FUNDSPORTFOLIOPORTFOLIOSPRICE CHANGEPRICE CHANGESPRICE DECREASEPRICE DECREASESPRICE EFFECTPRICESRATE OF RETURNRISK AVERSIONRISK EXPOSURESALESALESSECURITIES MARKETSSHORT SALESSPREADSTOCK PRICESSTOCKSTRADERSUTILITY FUNCTIONSVOLATILITYWEALTHWorld Bank10.1596/1813-9450-4076