{
  "title": "Stock Market Liquidity in Chile",
  "publication": "IMF Working Papers, November 16, 2016",
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  "summary": "Chile has a large but relatively illiquid stock market. Global factors such as global risk appetite and monetary policy in advanced economies are key cyclical determinants of liquidity in Chilean equities.",
  "sections": [
    {
      "heading": "Key findings",
      "content": "- Chile has a large but relatively illiquid stock market.\n- Global factors such as global risk appetite and monetary policy in advanced economies are key cyclical determinants of liquidity in Chilean equities.\n- Evidence from a cross-section of emerging markets suggests strong protection of minority shareholders can help improve stock market liquidity.\n- Currently, illiquid in Chilean may have to pay 3½ percent more as cost of equity."
    },
    {
      "heading": "Determinants of liquidity",
      "content": "- Cyclical determinants:\n  - Global risk appetite.\n  - Monetary policy in advanced economies.\n- Structural determinants:\n  - Investor protection and corporate governance arrangements (noted as important based on cross-country evidence)."
    },
    {
      "heading": "Cross-country evidence and implications",
      "content": "- Cross-section evidence from emerging markets indicates that stronger protection of minority shareholders is associated with improved stock market liquidity.\n- The analysis links governance features (investor protection) to liquidity outcomes, implying that regulatory and legal frameworks matter for market functioning."
    },
    {
      "heading": "Cost of equity and liquidity premium",
      "content": "- Illiquidity is associated with a higher cost of equity; the paper indicates a premium of 3½ percent for illiquid Chilean equities."
    },
    {
      "heading": "Policy recommendations",
      "content": "- Improve corporate governance in Chilean listed firms.\n- Specifically recommend the adoption of a stewardship code to strengthen governance and investor protection, with the aim of improving market liquidity and reducing the liquidity-related cost of equity.\n\nSource: Stock Market Liquidity in Chile, Luis Brandão-Marques, IMF Working Paper, November 16, 2016.\n\n---\n\n Content in this bundle\n\n- Stock Market Liquidity in Chile\n  - Stock Market Liquidity in Chile (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Stock Market Liquidity in Chile (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/stock-market-liquidity-in-chile-44405"
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    "Authors: Luis Brandao Marques",
    "Published: November 16, 2016",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781475554656.001",
    "Chile has a large but relatively illiquid stock market.",
    "Global factors such as global risk appetite and monetary policy in advanced economies are key cyclical determinants of liquidity in Chilean equities.",
    "Evidence from a cross-section of emerging markets suggests strong protection of minority shareholders can help improve stock market liquidity.",
    "Currently, illiquid in Chilean may have to pay 3½ percent more as cost of equity.",
    "Cyclical determinants:",
    "Structural determinants:",
    "Cross-section evidence from emerging markets indicates that stronger protection of minority shareholders is associated with improved stock market liquidity.",
    "The analysis links governance features (investor protection) to liquidity outcomes, implying that regulatory and legal frameworks matter for market functioning.",
    "Illiquidity is associated with a higher cost of equity; the paper indicates a premium of 3½ percent for illiquid Chilean equities.",
    "Improve corporate governance in Chilean listed firms.",
    "Specifically recommend the adoption of a stewardship code to strengthen governance and investor protection, with the aim of improving market liquidity and reducing the liquidity-related cost of equity.",
    "**Stock Market Liquidity in Chile**"
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