{
  "title": "Cross-Border Listings, Capital Controls, and U.S. Equity Flows to Emerging Markets",
  "publication": "IMF Working Papers, December 1, 2003",
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  "summary": "We analyze capital flows to emerging markets in a framework that incorporates two quantitative measures of financial integration, the intensity of capital controls and the extent of cross border listings, while controlling for traditional global (push) and country specific (pull) factors.",
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    {
      "heading": "Summary of analysis and framework",
      "content": "- The paper analyzes capital flows to emerging markets using a framework that incorporates:\n  - Two quantitative measures of financial integration: the intensity of capital controls and the extent of cross border listings.\n  - Controls for traditional global (push) and country specific (pull) factors.\n- Main empirical approach evaluates capital flow responses to cross listings and to changes in capital controls while accounting for push and pull variables."
    },
    {
      "heading": "Key findings",
      "content": "- Cross-listing effects:\n  - The cross listing of an emerging market firm on a U.S. exchange is an important but short lived capital flows event.\n  - Interpretation: the cross listed stock functions effectively as a new security that U.S. investors quickly incorporate into their portfolios.\n- Financial liberalization / capital controls:\n  - A reduction in capital controls results in increased inflows only when the controls are binding.\n  - Implication: the effect of financial liberalization on capital flows is more nuanced than suggested by event studies.\n- Push and pull factors:\n  - Global factors are important: slack U.S. economic activity is associated with increased flows to emerging markets.\n  - U.S. investors appear to chase expected, but not past, returns."
    },
    {
      "heading": "Policy-relevant implications",
      "content": "- Cross-listing:\n  - Cross listings generate rapid, concentrated inflows that dissipate relatively quickly; monitoring is important for market stability assessments.\n- Capital controls:\n  - Policymakers should recognize that easing capital controls will increase inflows primarily when existing controls are binding; blanket expectations of inflow surges after liberalization may be misplaced.\n- Investor behavior and global linkages:\n  - U.S. macroeconomic slack can drive capital to emerging markets, highlighting the role of global push factors in shaping flows.\n  - Measures of expected returns (rather than past returns) are relevant for anticipating U.S. portfolio equity flows.\n\n---\n\n Content in this bundle\n\n- Wp03236\n  - Wp03236 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Wp03236 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/cross-border-listings-capital-controls-and-u-s-16990"
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    "Authors: Hali J Edison, Francis E. Warnock",
    "Published: December 1, 2003",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451875706.001",
    "The paper analyzes capital flows to emerging markets using a framework that incorporates:",
    "Main empirical approach evaluates capital flow responses to cross listings and to changes in capital controls while accounting for push and pull variables.",
    "Cross-listing effects:",
    "Financial liberalization / capital controls:",
    "Push and pull factors:",
    "Cross-listing:",
    "Capital controls:",
    "Investor behavior and global linkages:",
    "**Wp03236**"
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