콘텐츠 바로가기
로그인
컨텐츠
  • HOME
  • SEARCH
PLUS Text Size MINUS RESET
FACEBOOK TWITTER Linked In

Category Open

Resources

tutorial

Collection of research papers and materials on development issues

home

Resources
Economy Trade

Print

The Quality Effect: Does Financial Liberalization Improve the Allocation of Capital?

Related Document
Frame of Image
  • The Quality Effect: Does Financial Liberalization Improve the Allocation of Capital?
  • Abiad, Abdul; Oomes, Nienke; Ueda, Kenichi
  • International Monetary Fund (IMF)


link
Title The Quality Effect: Does Financial Liberalization Improve the Allocation of Capital?
Similar Titles
Material Type Reports
Author(English)

Abiad, Abdul; Oomes, Nienke; Ueda, Kenichi

Publisher

International Monetary Fund (IMF)

Date 2004
Pages 34
Language English
File Type Link
Subject Economy < Trade
License

Abstract

The study documents evidence of a "quality effect" of financial liberalization on allocative efficiency, which is measured by the dispersion in Tobin's Q across firms. Based on a simple model, the authors predict that financial liberalization, by equalizing access to credit, reduces the variation in expected marginal returns. They test this prediction using a new financial liberalization index and firm-level data for five emerging markets: India, Jordan, Korea, Malaysia, and Thailand. They find strong evidence that financial liberalization, rather than financial deepening, improves allocative efficiency.