Stock market integration, cost of equity capital and corporate investment : evidence from Brazil
Hillier, David and Loncan, Tiago (2019) Stock market integration, cost of equity capital and corporate investment : evidence from Brazil. European Financial Management, 25 (1). pp. 181-206. ISSN 1354-7798 (https://doi.org/10.1111/eufm.12147)
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Abstract
We study the effect of stock market integration on the cost of capital and investment, using Brazil as a case study. We show that integration, as proxied by foreign ownership, has a positive impact on the financing side by reducing cost of capital. On the output side, we find that integration increases corporate investment, but only for well-governed firms. We contribute to the debate on the pros and cons of financial globalisation, particularly by providing evidence of important linkages between financial integration and real economic activity.
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Item type: Article ID code: 61291 Dates: DateEvent31 January 2019Published27 September 2017Published Online11 July 2017AcceptedSubjects: Social Sciences > Finance Department: Strathclyde Business School > Accounting and Finance Depositing user: Pure Administrator Date deposited: 19 Jul 2017 11:03 Last modified: 08 Apr 2024 23:31 Related URLs: URI: https://strathprints.strath.ac.uk/id/eprint/61291