We study the firm level evidence of the effect of financial openness on the emerging market host country economic performance. Specifically, we examine the asymmetrical effect of financial openness on firm growth, market concentration, and wage mediated by firm size. We conduct firm-year level panel regression analysis where we use 25 emerging market country panels for the 1990-2011 period. The firm-level analysis based on a comprehensive global dataset shows that financial openness favors larger firms, which attract greater foreign capital and grow faster; financial openness favors larger firms which achieve product market competitiveness due to easier access to capital markets, leading to an increasing profit and industrial concentration; the resulting market concentration leads to wage inequality; the asymmetric growth of larger firms relative to smaller firms disappears as the information environment of the host country improves.
Key words: financial openness, firm growth, market concentration, income inequality, information asymmetry
학회소식
[2017년 제 1차] The asymmetric effect of financial openness on firm
작성자 : 관리자
조회수 : 1075
게시일 :
2017-03-02
