Preprint Article Version 1 NOT YET PEER-REVIEWED

Does financial liberalization affect negatively emerging stock market stability?

  1. High School of Commerce of SFAX, University of Tunis, Tunis, Tunisia
Version 1 : Received: 17 July 2016 / Approved: 18 July 2016 / Online: 18 July 2016 (10:52:35 CEST)

How to cite: TRABELSI MNIF, A. Does financial liberalization affect negatively emerging stock market stability?. Preprints 2016, 2016070053 (doi: 10.20944/preprints201607.0053.v1). TRABELSI MNIF, A. Does financial liberalization affect negatively emerging stock market stability?. Preprints 2016, 2016070053 (doi: 10.20944/preprints201607.0053.v1).

Abstract

In this paper, we focus on the impact of financial liberalization on stability of emerging stock market. We identify crises in a group of Latin American (Argentina, Brazil and Chile) and Asian countries (Philippines, Korea, Taiwan and Thailand) during 1975–2005. This paper aims to apply the methodology of CMAX method. Our results indicate that liberalization triggers more unstable stock market in the short run and generate several crises. Still, liberalization seems to generate more stable financial markets in the long run. Financial liberalization does not increase the frequency of crises in emerging countries and at long-term, crises are less several.

Subject Areas

emerging stock market, financial liberalization, Crisis, Cmax method

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