Equity Market Liberalization in Emerging Markets

Equity market liberalizations, if effective, lead to important changes in both the financial and real sectors as the economy becomes integrated into world capital markets. The study of market integration is complicated because there are many ways one can liberalize and many countries have taken different routes. To study the effectiveness of particular liberalization policies, the sequencing of liberalizations, and the impact on the real economy, systematic methods must be developed to 'date' the liberalization of emerging equity markets. We provide a synthesis of the current methods, and also show the impact of liberalization on the real sector