Download or read book The Impact of Stock Market Liberalization on the Efficiency of Emerging Stock Markets written by Sonali Jain-Chandra and published by . This book was released on 2002 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: During the last two decades, many emerging markets have embarked on a course of economic reform, including stock market liberalization. This paper addresses the question of whether these markets have become more informationally efficient in the years following liberalization. We find that emerging stock markets become more efficient following liberalization. Additionally, using a panel data set on sixteen liberalizing countries and various measures of liquidity, we show that liberalization leads to enhanced liquidity after controlling for size and other factors. Furthermore, this paper addresses the question whether the increase in efficiency could be the result of an increase in liquidity. This paper concludes that an increase in liquidity leads to a decrease in market inefficiency. This confirms the intuition that enhanced liquidity might render emerging stock markets more efficient.