Year 2020, Volume 6 , Issue 1, Pages 30 - 56 2020-03-31

Stock Market Liberalization: Effects on Stock Market Development in the Emerging Islamic Countries

Bilal İLHAN [1]

It is more or less agreed that even though the rising trend has occurred in the stock markets of emerging countries during 1990s, those in the emerging Islamic countries (EIC), with the common characteristics of small size, less liquidity, less efficiency, high cost of capital and volatility, have not been able to perform at the same pace. The proponents of stock market liberalization (SML) prescribes liberalization as a full-fledge solution to the problems of the EIC, whereas the limited number of studies illustrate mixed results. Against this backdrop, this study aims to examine the effects of SML on the development of stock markets in EIC. Relying on panel data techniques on the sample of 7 EIC over the years 1989 to 2008, the results demonstrate that SML significantly increases stock market size and liquidity, hence contributing to the development of stock markets in the EIC. With these results, the study produces policy implications suggesting that SML has been beneficial to the stock markets and further liberalization policies should be implemented to deepen and broaden the stock markets in the EIC. 

Stock Market Liberalization, Stock Market Development, Emerging Islamic Countries, Financial Infrastructure
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Primary Language en
Subjects Business Finance
Published Date Mart
Journal Section Articles

Orcid: 0000-0002-5317-590X
Author: Bilal İLHAN (Primary Author)
Institution: Presidency of the Republic of Turkey, Investment Office
Country: Turkey


Publication Date : March 31, 2020

APA İlhan, B . (2020). Stock Market Liberalization: Effects on Stock Market Development in the Emerging Islamic Countries. International Journal of Islamic Economics and Finance Studies , 6 (1) , 30-56 . DOI: 10.25272/ijisef.629755