The Effects of Financial Liberalization on Market Capitalization Ratio

Subject Areas : Financial Knowledge of Securities Analysis

اعظم احمدیان ¹ ( نویسنده مسئول )
مهدی تقوی ² ( ندارد )

Received: 2011-05-02 Accepted : 2011-09-15 Published : 2011-09-23

Keywords: financial liberalization, Market Capitalization Ratio, foreign direct investment, Panel Data Method,

Abstract :

This paper evaluates the effects of financial liberalization on Market Capitalization Ratio, from 1990 to 2008, for a sample of 6 countries. These countries are of the MENA region: Egypt, Oman, Saudi Arabia,, Iran Islamic Rep, Jordan, Tunisia. We used the Foreign Direct Investment as financial liberalization index. The finding shows that financial liberalization spurs Market Capitalization Ratio. Unfortunately this effect is low. Some of reasons are economic instability , visit constraint for foreign investment and securities expansion to them. Economic stability and substructure provisions and precaution for securities expansion to foreign investment are precondition to liberalization