Brazilian Financial Markets Analyzing the Integration of (original) (raw)
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Essays on financial market integration
RePEc: Research Papers in Economics, 2009
this measure, Gruben and McLeod (2001) show that out of a sample of 112 countries, 69 have reduced restrictions on foreign currency transactions, 26 countries kept their current account policies unchanged and only 17 have tightened controls over the 1990s. This decade brought a substantial improvement over the 1980s, with an overall index of openness rising from 1.6 to 2.1. Also, the trend towards liberalization is confirmed by the growing number of "totally open" countries, with a perfect score of 4, from 13 (in the 1980s) to 21 (in the 1990s). These tendencies are corroborated by several "quantity-based" measures of international financial linkages. Lane and Milesi-Ferretti (2003) propose two indices of international integration: a volume-based measure (from the aggregate amounts of foreign vestment choice. Traditionally, the home bias literature relies on the standard Capital Asset Pricing Model (CAPM) when computing the optimal investment portfolio. That is, all investors, regardless of their country of origin, should hold the same combination of risky assets, in identical proportions, given by the shares of the market capitalization Chapter 2 Measuring Financial Market Integration: An Application for the East-European New Member States An earlier version of this essay was released in June 2003 under the title "Measuring Financial Market Integration in the European Monetary Union: An Application for East-European Accession Countries". The author would like to thank Péter Benczúr, Melisso Boschi and participants at the Spring Meeting of Young Economists (Warsaw 2004) for useful comments.
International Financial Integration Through Equity Markets
2007
This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper studies international financial integration analyzing firms from various countries raising capital, trading equity, and/or cross-listing in major world stock markets. Using a large sample of 39,517 firms from 111 countries covering the period 1989-2000, we find that, although international financial integration increases substantially over this period, only relatively few countries and firms actively participate in international markets. Firms more likely to internationalize are from larger and more open economies, with higher income, better macroeconomic policies, and worse institutional environments. These firms tend to be larger, grow faster, and have higher returns and more foreign sales. While changes occur with internationalization, these firm attributes are present before internationalization takes place. The results suggest that international financial integration will likely remain constrained by country and firm characteristics.
Financial Markets Integration: Appraising the Developed and Emerging Markets Nexus
International Journal of Economics and Financial Issues, 2017
While many economists see financial globalization (financial markets integration) as critical to the development and strengthening of middle-income emerging markets, many have opined that financial integration carries huge risk that far outweighs potential benefits for most middle-income countries. This study therefore investigated the interdependence between emerging markets and developed markets. The study deployed the Diebold and Yilmaz methodological approach to investigate spill-over between markets. The research concluded that there exists interdependence between developed markets and emerging markets. The net benefits argument of financial markets held. Given increasing globalization none of the markets, whether developed or emerging is immune from the dynamics of global markets with consequential beneficial and deleterious impacts. The study recommended that emerging markets should institute reforms capable of enhancing a beneficial involvement in the global integration of f...
Some Political Changes in Brazilian Financial Institutionalization Path
Passagens Revista Internacional de História Política e Cultura Jurídica, 2012
This article discusses recent political changes in the trajectory of financial institutionalisation in Brazil. It considers how, since Lula's two mandates, the Brazilian financial system has trialled several changes to its characteristics in comparison to the events of the 1990s. These new trends have also occurred mainly because during Lula's two mandates and today's mandate under Dilma Rousseff, a developmental economic policy has been implemented in which Brazilian state-owned banks play a more active role. This is especially true of the approach to 2008's international financial crisis and that employed since August 2011, which has seen the Central Bank of Brazil (BCB) liaising with other public economic agencies, such as the Ministry of Finance, under the political authority of the Brazilian president.
New Political Economy
This paper analyses the recent changes in financial practices and relations in emerging capitalis t economies (ECEs) using the example of Brazil. It argues that in ECEs these financ ia l transformations, akin to the financialisation phenomena observed in Core Capitalist Economies (CCEs), are fundamentally shaped by their subordinated integration into a financialised and structured world economy. To analyse this subordinated financialisation the paper draws on the framework of international currency hierarchies. It shows by means of two specific processes how the existence of a hierarchic international monetary system has changed the financial behaviour of domestic economic agents and with it the structure of the financial system. The first process highlights the phenomenon of reserve accumulation and the changing behaviour of domestic banks. The second points to ECEs' sustained external vulnerability and its impact on the operations of Brazilian non-financial corporations. The paper also shows that not only were these financ ia l transformation shaped by ECEs' subordinated financial integration, but it was these financialisation tendencies themselves which contributed to cementing existing hierarchies and further deepened existing asymmetries between ECEs and CCEs.
Capital Markets in the Development Process
Capital Markets in the Development Process, 1993
The importance of financial and capital markets has become a focal point of recent research in economic development. Views on the benefits from vigorous financial and capital markets range from efficiently allocating scarce capital resources to increasing domestic saving and investment to enhancing macroeconomic stability. The trick, however, is to create working financial and capital markets where none exist. Recent policy prescriptions have emphasized liberalizing financial markets, allowing the free play of market forces to establish the incentives for the creation of financial institutions and instruments that heretofore had not existed. The financial reforms whose only instrument was liberalization, however, have been failures on the whole, e.g. the Southern Cone countries of Latin America of Argentina, Chile, and Uruguay. The distinguishing characteristic of the Brazilian experience is that not only were reformers successful in creating robust financial and capital markets: they also combined the liberalizing technique of increasing real interest rates to borrowers and lenders with an institution-building approach. Brazilian reformers created a Central Bank, a National Housing System with the centrepiece the National Housing Bank (BNH), expanded the powers of the National Development Bank (BNDES), created tax incentives for the issuance of common stock, and, most importantly, created inflation indexation of financial assets. The reforms and institutions did encounter problems and failures but the financial system grew throughout the economically turbulent 1970s and 1980s. An understanding of the motivations of the reforms, the resulting financial structure, and the performance and problems of the resulting financial system should provide some insight into the Brazilian success story and indicate where improvements are needed. This study is meant to systematically analyze developments in Brazilian financial and capital markets to this end. This book is the culmination of six years of research. I hope it will prove an important step in understanding the role of financial markets in Brazil and in Latin America and developing countries in general. This work would not have been possible if not for the help of many people. I would like to thank Werner Baer, who as adviser and friend guided my research and writing from start to finish. Further, I
STOCK MARKET INTEGRATION AMONG BRICS NATIONS -AN EMPIRICAL ANALYSIS
A study on integration among stock markets from different countries having an enormous importance in a globalised economic world. Being an awful economic force BRICS group of nations can change the economic climate of the world, if they are highly financially integrated. The primary objective of this paper is to investigate the integration among BRICS nations during the past 10 years (2005 to 2015) by considering daily price histories of IBrX 50, RTSI, Nifty Index, Shanghai Composite Index, and FTSI-Africa Index for Brazil, Russia, India, China and South Africa respectively. It has been applied Johansen Co-integration Test (1988) and Pairwise Granger Causality test to remark interdependencies and dynamic linkages among selected markets. Surprisingly, Even though it is an Hulking economic force in the world, It have no long run relationship between them and some unidirectional cause and effect relationship only existed. Finally this paper allege better candidacy of the stock exchanges in multinationally diversified portfolios.
2017
While many economists see financial globalization (financial markets integration) as critical to the development and strengthening of middle-income emerging markets, many have opined that financial integration carries huge risk that far outweighs potential benefits for most middle-income countries. This study therefore investigated the interdependence between emerging markets and developed markets. The study deployed the Diebold and Yilmaz methodological approach to investigate spill-over between markets. The research concluded that there exists interdependence between developed markets and emerging markets. The net benefits argument of financial markets held. Given increasing globalization none of the markets, whether developed or emerging is immune from the dynamics of global markets with consequential beneficial and deleterious impacts. The study recommended that emerging markets should institute reforms capable of enhancing a beneficial involvement in the global integration of f...