Politics and the Extension of Equity Finance to Emerging Markets

Lavelle, Kathryn C.

doi:10.1093/0195174097.003.0001

Cited by 5 publications

(8 citation statements)

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“…Next to historical accounts of individual exchanges (e.g. Michie, 1999), political economists have rather focused on the impact that financial liberalization had on exchanges' members (Moran, 1990;Cerny, 1989), the electronification of exchange markets (Zaloom, 2006;Gorham and Singh, 2009), the politics of establishing certain exchanges (Posner, 2009;Lütz, 1998;Lavelle, 2004) or their role as policy actors (Mügge, 2011). Their own role as actors in capital markets has been analyzed only partially (Botzem and Dahl, 2014;Wójcik, 2012), focusing for instance on them creating financial products (Millo, 2007), facilitating high frequency trading (HFT) (MacKenzie et al, 2012), and the fragmentation of equity markets (Castelle et al, 2016).…”

Section: Exchanges In the Financialization Literaturementioning

confidence: 99%

“…cross listings). While the role of the state and international financial institutions (Lavelle, 2004), domestic political coalitions (Zhang, 2009) and pressures from global markets (Cerny, 1989) have been highlighted as push factors for capital market development, the role of exchanges in these processes is less well understood (but see Botzem and Dahl, 2014).…”

Section: Financial Globalization: Spreading Capital Markets Around Thmentioning

confidence: 99%

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Securities exchanges: Subjects and agents of financialization

Petry¹

2019

Preprint

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How have exchanges shaped financialization? This chapter argues that similar to other financial market actors, securities exchanges have themselves undergone a significant transformation. In the last 25 years, marketization, internationalization, and digitization have fundamentally changed the way exchanges function, turning them from national marketplaces into markets actors. As a result of this transformation, exchanges have become crucial agents in processes of financialization. First, by organizing capital markets they influence market dynamics, facilitating volatility and market stability. Second, exchanges have turned into agents of disintermediation, selling and exporting financial technologies and expertise, facilitating the development of capital markets globally. Third, exchanges have emerged as politically and economically powerful players, both vis-à-vis other market actors but also towards regulators and states. Overall, through their transformation exchanges have become crucial actors in the spreading of capital markets, the transformations of contemporary finance and the politics of financialization.

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Section: Exchanges In the Financialization Literaturementioning

confidence: 99%

Section: Financial Globalization: Spreading Capital Markets Around Thmentioning

confidence: 99%

Securities exchanges: Subjects and agents of financialization

Petry¹

2019

Preprint

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“…By relatively early in the nineteenth century, the London Stock Exchange had become the primary market for sovereign debt (Neal and Davis ), with the Paris Bourse playing a secondary role. Still, Paris remained an important market into the twentieth century for Russia, China, Romania, and other borrowers (see, e.g., Lavelle , 35). During the period in which Paris was an important global market, French sovereign immunity law appeared to evolve.…”

Section: The Evolution Of Sovereign Immunity Lawmentioning

confidence: 99%

“…We believe this is the most comprehensive dataset of bond terms, but there remain gaps in the data. The most notable relates to the Paris Bourse, which, despite its relative insignificance by the early twentieth century, remained a key market for a number of sovereign issuers (Lavelle , 35). We gathered data on the Paris market from three sources.…”

Section: How Contracts Respondedmentioning

confidence: 99%

Market Practice and the Evolution of Foreign Sovereign Immunity

Weidemaier¹,

Gulati²

2018

Law soc. inq.

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The twentieth century witnessed a “tectonic” shift in international law, from absolute to restrictive theories of sovereign immunity. As conventionally understood, however, this transformation represented only a change in default rule. Under absolute immunity, courts could not hear lawsuits and enforce judgments against a foreign sovereign without its consent. Under restrictive immunity, foreign sovereigns were not immune to their commercial acts, regardless of consent. Using a two‐century dataset of loan contracts, we show that market practice undermines this conventional understanding. For centuries, loan contracts were structured as if the rules of sovereign immunity could not be changed by contract. In the 1970s, however, market practice changed, seemingly in response to the codification of sovereign immunity law in the United States and United Kingdom. We explore why market practice conflicts with the conventional understanding of sovereign immunity, and we examine the association between codification and the structure of sovereign loan contracts.

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“…Equity markets enhance corporate efficiency, spur innovation, and provide a valuable source of capital for long‐term economic development (Lavelle 2004; Sobel 1994). They also provide a useful mechanism for governments to raise capital through the sale of state‐owned enterprises.…”

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confidence: 99%

Taking Stock Seriously: Equity-Market Performance, Government Policy, and Financial Globalization

Mosley

Singer

2008

Int Studies Q

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Are equity markets just another facet of global finance, or are they unique in their responses to-and influences on-government policies and institutions? Recent work has explored the impact of political factors on bond market behavior and foreign direct investment, but little attention has been paid to stock markets. On the basis of the particular concerns of equity investors, we hypothesize a positive association between stock-market valuations and levels of democracy, shareholder rights, legal traditions, and capital-account liberalization, a negative association with real interest rates, and no association with fiscal deficits or surpluses. We assess our expectations by analyzing the political and institutional determinants of aggregate price-to-earnings ratios for a sample of up to 37 countries from 1985 to 2004, using both cross-sectional and time-series cross-sectional analyses. We find support for most, but not all, of our hypotheses. Our findings suggest that we must disaggregate the effects of different asset markets to understand the impact of economic globalization on government policies.How do government policies and institutions affect equity-market performance across countries? As stock markets grow broader and deeper in both the developed and developing worlds, this question becomes more critical. In 2004, global stock-market capitalization stood at $37.2 trillion, compared to global GDP of $41.3 trillion. While this figure was slightly less than global commercial bank assets ($57.3 trillion), it markedly exceeded the total size of outstanding public debt securities, which were $23.1 trillion. 1 The bulk of global stock-market capitalization represents developed-country equity markets, but less developed country (LDC) markets-which accounted for 14 percent of total capitalization in International Studies Quarterly (2008) 52, 405-425

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Politics and the Extension of Equity Finance to Emerging Markets

Cited by 5 publications

References 0 publications

Securities exchanges: Subjects and agents of financialization

Securities exchanges: Subjects and agents of financialization

Market Practice and the Evolution of Foreign Sovereign Immunity

Taking Stock Seriously: Equity-Market Performance, Government Policy, and Financial Globalization

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