Capital Market Imperfections and Financialization of Real Sectors in Emerging Markets: Private Investment and Cash Flow Relationship Revisited

World Development

Volumn 37, Issue 5, 2009, Pages 953-964

  DemIr, FIrat ^a  

^a UNIVERSITY OF OKLAHOMA   (United States)

Author keywords

financial liberalization; financialization; financing constraints; Mexico; private investment; Turkey

Indexed keywords

CAPITAL FLOW; CAPITAL MARKET; EMPIRICAL ANALYSIS; FINANCIAL MARKET; PRIVATE SECTOR;

EURASIA; MEXICO [NORTH AMERICA]; NORTH AMERICA; TURKEY;

EID: 63149148161     PISSN: 0305750X     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.worlddev.2008.09.003     Document Type: Article

References (62)

1. Abel, A. (1980). Empirical investment equations: an integrative framework. In Brunner, K., & Meltzer, A. (Eds.), On the State of Macroeconomics (pp. 39-93). Carnegie-Rochester Conference Series, Vol. 12.
2. Abel A., and Blanchard O. The present value of profits and cyclical movements in investment. Econometrica 54 (1986) 249-274
3. Aizenman J., and Marion N. Volatility and investment: Interpreting evidence from developing countries. Economica 66 (1999) 157-179
4. Arellano M., and Bond S.R. Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. Review of Economic Studies 58 (1991) 277-297
5. Bank for International Settlements (BIS) (2007). Triennial central bank survey: Foreign exchange and derivatives market activity in 2007. Basel, Switzerland: BIS.
6. Blundell R., Bond S., and Meghir C. Econometric models of company investment. In: Matyas L., and Sevestre P. (Eds). The econometrics of panel data (1992), Kluwer Academic Publishers, Netherlands 388-413
7. Bond S., and Meghir C. Dynamic investment models and the firm's financial policy. Review of Economic Studies 61 (1994) 197-222
8. Comin D., and Mulani S. Diverging trends in aggregate and firm volatility. The Review of Economics and Statistics 88 (2006) 374-383
9. Crotty J. The Neoliberal paradox: The impact of destructive product market competition and 'modern' financial markets on nonfinancial corporation performance in the Neoliberal era. In: Epstein G. (Ed). Financialization and the world economy (2005), Edward Elgar, Massachusetts 77-110
10. Demir F. A failure story: Politics and financial liberalization in Turkey, revisiting the revolving door hypothesis. World Development 32 5 (2004) 851-869
11. Demir F. Financial liberalization, private investment and portfolio choice: Financialization of real sector in emerging markets. Journal of Development Economics 88 (2009) 314-324
12. Demir, F. (forthcoming). Volatility of short term capital flows, financial anarchy and private investment in emerging markets. Journal of Development Studies.
13. Devereux M.B., and Schiantarelli F. Investment, financial factors and cash flow from UK panel data. In: Hubbard G. (Ed). Asymmetric information, corporate finance and investment (1990), University of Chicago Press, Chicago 279-306
14. Devereux M.B., and Smith G.W. International risk sharing and economic growth. International Economic Review 35 (1994) 535-551
15. Diaz Alejandro C. Good-bye financial repression, hello financial crash. Journal of Development Economics 19 1-2 (1985) 1-24
16. Driver C., and Moreton D. The influence of uncertainty on UK manufacturing investment. Economic Journal 101 (1991) 1452-1459
17. Dumenil G., and Levy D. Costs and benefits of neoliberalism: A class analysis. In: Epstein G. (Ed). Financialization and the World Economy (2005), Edward Elgar, Massachusetts 17-45
18. Economic Intelligence Unit (EIU). (2008a). Country Finance, Mexico, Economic Intelligence Unit.
19. Economic Intelligence Unit. (2008b). Country Finance, Turkey, Economic Intelligence Unit.
20. Eisner R. Factors in business investment (1978), Ballinger, Cambridge, MA
21. Epstein G.A., and Jayadev A. The rise of rentier incomes in OECD Countries: Financialization, central bank policy and labor solidarity. In: Epstein G. (Ed). Financialization and the world economy (2005), Edward Elgar, Massachusetts 46-74
22. Fazzari S., Hubbard R.G., and Petersen B.C. Financing constraints and corporate investment. Brookings Papers on Economic Activity 1 (1998) 141-195
23. Federer J. The impact of uncertainty on aggregate investment spending. Journal of Money, Credit and Banking 25 (1993) 30-48
24. Felix D. Asia and the crisis of financial globalization. In: Baker D., Epstein G., and Pollin R. (Eds). Globalization and progressive economic policy (1998), Cambridge University Press 163-194
25. Frenkel R., and Ros J. Unemployment and the real exchange rate in Latin America. World Development 34 4 (2006) 631-646
26. Gabriele A., Boratav K., and Parikh A. Instability and volatility of capital flows to developing countries. The World Economy 23 (2000) 1031-1056
27. Gelos G., and Werner A. Financial liberalization, credit constraints and collateral: Investment in the Mexican manufacturing sector. Journal of Development Economics 67 (2002) 1-27
28. Goldberg, L., Dages, B. G., & Kinney, D. (2000). Foreign and domestic bank participation in emerging markets: Lessons from Mexico and Argentina. NBER Working Paper 7714.
29. Grabel I. Assessing the impact of financial liberalisation on stock market volatility in selected developing countries. The Journal of Development Studies 31 6 (1995) 903-917
30. Guncavdi O., Bleaney M., and McKay A. Financial liberalization and private investment: evidence from Turkey. Journal of Development Economics 57 (1998) 443-455
31. Hubbard G. Capital market imperfections and investment. Journal of Economic Literature 36 (1998) 193-225
32. International Monetary Fund (IMF). Mexico: Recent economic developments (1995), IMF Staff Country Reports, Washington, DC
33. ISO (Istanbul Chamber of Industry). Top 500 Manufacturing Firms Survey. Various Issues, Istanbul: ISO.
34. Keynes J.M. The general theory of employment, interest and money (1964), Harcourt, New York
35. Kose, A., Prasad, E., & Terrones, M. (2003). Financial integration and macroeconomic volatility. IMF Staff Paper 03/50. Washington, DC: IMF.
36. Kregel J.A. Margins of safety and weight of the argument in generating financial fragility. Journal of Economic Issues 31 2 (1997) 543-548
37. Kregel, J. A. (2007). The natural instability of financial markets. Levy Institute Working Paper No. 523.
38. Laeven L. Does financial liberalization reduce financing constraints?. Financial Management 32 (2003) 5-34
39. Lustig N.C., and Ros J. Economic reforms, stabilization policies, and the "Mexican disease". In: Taylor L. (Ed). After neoliberalism: What next for Latin America? (1999), University of Michigan Press, Ann Arbor 17-52
40. Modigliani F., and Miller M.H. The cost of capital, corporation finance and the theory of investment. American Economic Review 48 (1958) 261-297
41. Montiel, P., & Serven, L. (2004). Macroeconomic stability in developing countries: How much is enough? World Bank Policy Research Working Paper 3456. World Bank.
42. Orhangazi O. Financialization and capital accumulation in the nonfinancial corporate sector: A theoretical and empirical investigation on the US economy, 1973-2004. Cambridge Journal of Economics 32 (2008) 887-906
43. Pindyck R., and Solimano A. Economic instability and aggregate investment. In: Blanchard O.J., and Fischer S. (Eds). NBER macroeconomics annual (1993), MIT Press, Cambridge 259-302
44. Rojas-Suarez, L., & Weisbrod, S. (1996). Building stability in Latin American financial markets. Working Paper No. 320 (February), Washington, DC: Inter-American Development Bank.
45. Serven L. Macroeconomic uncertainty and private investment in LDC: An empirical investigation (1998), The World Bank, Mimeo, Washington, DC
46. SPK (Capital Markets Board of Turkey). Trading volume in secondary markets (2004), SPK, Ankara Monthly Bulletin
47. Stiglitz J.E. Capital market liberalization, economic growth, and instability. World Development 28 6 (2000) 1075-1086
48. Stiglitz J.E., and Weiss A. Credit rationing in markets with imperfect information. American Economic Review 71 (1981) 393-410
49. Stockhammer E. Financialization and the slowdown of accumulation. Cambridge Journal of Economics 28 5 (2004) 719-741
50. Taylor L. Income distribution, inflation and growth: Lectures on structuralist macroeconomic theory (1991), MIT Press, Cambridge, MA
51. Taylor L. Capital market crises: Liberalisation, fixed exchange rates and market-driven destabilisation. Cambridge Journal of Economics 22 (1998) 663-676
52. Taylor L. Reconstructing macroeconomics (2004), Harvard University Press, Massachusetts
53. Taylor L., and O'Connell S.A. A Minsky crisis. Quarterly Journal of Economics 100 5 (1985) 871-885
54. Tobin J. Money and economic growth. Econometrica 33 4 (1965) 671-684
55. Tornell A. Real vs. financial investment: Can Tobin taxes eliminate the irreversibility distortion?. Journal of Development Economics 32 (1990) 419-444
56. UNCTAD. Trade and development report (2006), UNCTAD, Geneva
57. UNCTAD. Trade and development report (2007), UNCTAD, Geneva
58. United Nations Conference on Trade and Development (UNCTAD). Trade and development report (2003), UNCTAD, Geneva
59. Van Reenen, J., & Bond, S. (2007). Microeconometric models of investment and employment. In: Heckman, J.J., & Leamer, E.E. (Eds.), Handbook of econometrics (Vol. 6A, pp. 4417-4498). North Holland.
60. Weller C.E. Financial crises after financial liberalisation: Exceptional circumstances or structural weakness?. The Journal of Development Studies 38 1 (2001) 98-127
61. World Bank. World development report (2005), Oxford University Press, New York
62. Yeldan E. Neoliberal global remedies: From speculative-led growth to IMF-led crisis in Turkey. Review of Radical Political Economics 38 2 (2006) 193-213