Contagion and Firms’ Internationalization in Latin America : Evidence from Mexico, Brazil, and Chile

Sakho, Yaye Seynabou

World Bank, Washington, DC

关键词: ASSETS;    ASYMMETRIC INFORMATION;    CAPITAL MARKET;    CAPITAL MARKETS;    CONTAGION;   

DOI  :  10.1596/1813-9450-4076
RP-ID  :  WPS4076

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The author investigates whether contagion matters when emerging market firms cross-list their stocks in a developed capital market. She develops a rational expectations model where financial markets are segmented along emerging markets' borders and contagion spreads from one emerging market to another through the actions of international investors rebalancing their portfolio using stocks cross-listed in the developed market. The author finds that contagion is a cost of internationalization as cross-listed stocks are more affected by contagion than pure domestic stocks. Furthermore, a welfare analysis of international cross-listing versus financial autarky suggests that the benefits of internationalization in terms of less information asymmetry and better market efficiency offset the costs of contagion. Her model is able to explain some transmission of the 1998 Brazilian crisis to Mexico and Chile.