In a sample of 686 investable firms from 26 emerging market countries, I show that equity market liberalizations do not result in an increase in externally-financed growth rates for participating firms. In fact I find mostly to the contrary. These findings are in line with recent work which shows that firms issue less and not more equity capital post-liberalization, and suggest the gains from equity market liberalizations may not be attributable to a reduction in financing constraints.
O’Connor, T. (2013). Equity market liberalization and firm growth. Review of Development Finance, 3(1), 1–12. https://doi.org/10.1016/j.rdf.2013.01.002