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The Determinants of Stock Market Development and Liquidity in Capital Markets

The Determinants of Stock Market Development and Liquidity in Capital Markets

Sarah Newton, Ingrid O'Connor
Copyright: © 2017 |Pages: 15
ISBN13: 9781522519003|ISBN10: 1522519009|EISBN13: 9781522519010
DOI: 10.4018/978-1-5225-1900-3.ch010
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MLA

Newton, Sarah, and Ingrid O'Connor. "The Determinants of Stock Market Development and Liquidity in Capital Markets." Value Relevance of Accounting Information in Capital Markets, edited by Marianne Ojo and Jeanette Van Akkeren, IGI Global, 2017, pp. 141-155. https://doi.org/10.4018/978-1-5225-1900-3.ch010

APA

Newton, S. & O'Connor, I. (2017). The Determinants of Stock Market Development and Liquidity in Capital Markets. In M. Ojo & J. Van Akkeren (Eds.), Value Relevance of Accounting Information in Capital Markets (pp. 141-155). IGI Global. https://doi.org/10.4018/978-1-5225-1900-3.ch010

Chicago

Newton, Sarah, and Ingrid O'Connor. "The Determinants of Stock Market Development and Liquidity in Capital Markets." In Value Relevance of Accounting Information in Capital Markets, edited by Marianne Ojo and Jeanette Van Akkeren, 141-155. Hershey, PA: IGI Global, 2017. https://doi.org/10.4018/978-1-5225-1900-3.ch010

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Abstract

“At the early stages of its establishment the stock market is a complement rather than substitute for the banking sector. Developing the banking sector can promote stock market development as demonstrated by the experiences of many East Asian countries. However, when stock markets are sufficiently developed they tend to compete with the banking sector as shown by findings.” How does commercial banking impact investment activities in capital markets – and particularly developed capital markets? Is it true then that in certain economies, the banking sector serves as a complementary component of the financial system – up till a stage where it begins to compete with the securities sector? As well as investigating these observations, this chapter is aimed at investigating the validity of Efficient Markets Hypothesis and Efficient Capital Markets Hypothesis in emerging economies – as contrasted with advanced market economies. In so doing, it aims to contribute to the extant literature on stock market liquidity and liquidity in capital markets.

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