This article is an exploratory examination of the benefits and risks associated with opening of stock markets. Specifically, we estimate changes in the level and volatility of stock returns, inflation, and exchange rates around market openings. We find that stock returns increase immediately...

This paper examines the benefits and risks of market internationalization by analyzing the effect of recent market openings in developing countries. We estimate changes in the return and volatility of stock prices, portfolio flows, and the volatility of portfolio flows around market openings. We...

Although policymakers of emerging nations routinely brand foreign capital as "hot money" and hold it responsible for the ills of their economies, this article suggests that the experience of opening up their markets to overseas investors has been largely beneficial for the host countries. Based...