Popular interpretation of the recent financial scandals describes the individuals and firms charged with wrongdoing as ‘bad apples’ while retaining a sanguine view of the capital markets overall. The system-wide reach of the revealed malfeasance, however, suggests that the root cause of the scandals resides instead in the capital markets’ institutional norms. Specifically, we argue that norms h...

In advice given to emerging market economies (EMEs), it is often emphasised that having developed financial markets would both enable them to manage capital flows more efficiently, thereby reducing the need to intervene in the foreign exchange markets, and allow for more effective monetary policy. But despite their evident benefits, it is also the case that developed financial markets can compl...

Do capital markets reward companies for their environmental policies, goals and activities or their efforts at reducing the release of toxic substances? This paper examines the relationship between environmental conscientiousness scores and stock returns. It appears that the US capital markets have only weakly rewarded environmentally conscientious companies. However, companies with the worst e...

In spite of significant institutional and macroeconomic reforms over the last decade or two, capital flows to developing economies remain highly volatile. In 1996, net private capital flows to emerging markets reached US$230 billions; by 1997 these flows had been cut in half; by 1998 halved again; and after a mild recovery during 1999, flows fell in 2000 and 2001 to slightly over one-tenth the ...

Capital Control Stock markets become larger, more liquid, more integrated Liberalization and Stock internationally, and more volatile after controls on capital and dividend flowas are liberalized. And countries that Ross Levine officially establish Sara Zervos internationally accepted accounting standards and laws to protect investors do not have substantially be..erfunctioning stock markets th...

This paper examines the impact of venture capitalists’ reputation building and experience accumulation on the genesis of venture capital markets. Venture capitalists must accumulate experience to successfully support high-technology enterprises. They must build reputation, i.e., a track record for successfully financing high-technology enterprises, in order to raise new funds from outside inves...

In an efficient economy, capital should be quickly (re)allocated from declining firms and sectors to more profitable investment opportunities. This process is affected by the concentration of corporate control, which in turn is affected by market institutions. We employ a panel of 12,000 firms across 44 countries to estimate the functional efficiency of capital markets. We adapt a measure for t...