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Financial openness and market liquidity in emerging markets

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  • Lee, Chia-Hao
  • Chou, Pei-I

Abstract

The goal of this study is to explore the effect of financial openness in emerging markets on the domestic financial market liquidity and then to clarify the linkage between financial openness and market liquidity. The empirical results show that higher the degree of the financial market openness enhances the domestic financial market liquidity, and the effect of the financial market openness on the emerging markets is more significance than the developed markets. We expect the empirical results of this study can provide a new insight into the development of emerging financial markets.

Suggested Citation

  • Lee, Chia-Hao & Chou, Pei-I, 2018. "Financial openness and market liquidity in emerging markets," Finance Research Letters, Elsevier, vol. 25(C), pages 124-130.
    • Handle: RePEc:eee:finlet:v:25:y:2018:i:c:p:124-130
    DOI: 10.1016/j.frl.2017.10.024
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    3. Jonathan Batten & Xuan Vinh Vo, 2019. "Liquidity And Firm Value In An Emerging Market," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(02), pages 365-376, March.
    4. Yuliang Yang & Chaoqun Cui, 2022. "Which Provincial Regions in China Should Give Priority to the Redevelopment of Abandoned Coal Mines? A Redevelopment Potential Evaluation Based Analysis," Sustainability, MDPI, vol. 14(23), pages 1-22, November.
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    7. Andrei Dimcea, 2022. "Determinants of Stock Market Liquidity. The Quantifiable Effects of Psychic Distance Stimuli," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 14(2), pages 107-120, December.
    8. Sheunesu Zhou, 2021. "Analyzing the Relationship between Derivative Usage and Systemic Risk in South Africa," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 9(4), pages 217-234.
    9. Mohd Ashari Bakri & Bany-Ariffin Amin Nordin & Bolaji Tunde Matemilola & Lau Wei Theng, 2020. "Moderating Role of Financial Market Development on the Relationship between Stock Liquidity and Dividend," Asian Academy of Management Journal of Accounting and Finance (AAMJAF), Penerbit Universiti Sains Malaysia, vol. 16(2), pages 77-99.
    10. Tongurai, Jittima & Vithessonthi, Chaiporn, 2023. "Financial openness and financial market development," Journal of Multinational Financial Management, Elsevier, vol. 67(C).
    11. Yahui Yang & Zhe Peng, 2024. "Openness and Real Exchange Rate Volatility: Evidence from China," Open Economies Review, Springer, vol. 35(1), pages 121-158, February.

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    More about this item

    Keywords

    Financial openness; Market liquidity; Globalization; Emerging markets;
    All these keywords.

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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