Impact of Market Openness on Growth and Stability in Korea
A controversy about whether liberalization through market opening is a necessary and sufficient condition for a stable and balanced growth in the developing countries was retriggered by the 2008 global financial crisis. This paper aims to analyze 1) the impact of market openness on the economic grow...
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| Format: | Article |
| Language: | English |
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Emerald Publishing
2013-08-01
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| Series: | Journal of International Logistics and Trade |
| Online Access: | https://www.emerald.com/insight/content/doi/10.24006/jilt.2013.11.2.71/full/pdf |
| _version_ | 1797612275373178880 |
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| author | Wonchang Jang |
| author_facet | Wonchang Jang |
| author_sort | Wonchang Jang |
| collection | DOAJ |
| description | A controversy about whether liberalization through market opening is a necessary and sufficient condition for a stable and balanced growth in the developing countries was retriggered by the 2008 global financial crisis. This paper aims to analyze 1) the impact of market openness on the economic growth and financial development, 2) the dynamic correlation between the compositional change in foreign investments and the returns of domestic financial markets, 3) the effect of foreign portfolio investment on the stock market activity (liquidity and profitability). Our empirical findings infer that the income level has a positive relationship with financial openness and the foreign portfolio investments cause price fluctuations in the domestic stock market. These results imply that the precautionary and effective policies such as prudential regulations on the short-term capital transactions are strongly needed to emerging markets in order to prevent the excessive fluctuations in the financial markets over the macroeconomic fundamentals. |
| first_indexed | 2024-03-11T06:38:58Z |
| format | Article |
| id | doaj.art-8f43d56bc46943648d6c3c75a7f29009 |
| institution | Directory Open Access Journal |
| issn | 1738-2122 2508-7592 |
| language | English |
| last_indexed | 2024-03-11T06:38:58Z |
| publishDate | 2013-08-01 |
| publisher | Emerald Publishing |
| record_format | Article |
| series | Journal of International Logistics and Trade |
| spelling | doaj.art-8f43d56bc46943648d6c3c75a7f290092023-11-17T10:43:29ZengEmerald PublishingJournal of International Logistics and Trade1738-21222508-75922013-08-01112718610.24006/jilt.2013.11.2.71Impact of Market Openness on Growth and Stability in KoreaWonchang Jang0School of Economics, Inha University, Incheon, KoreaA controversy about whether liberalization through market opening is a necessary and sufficient condition for a stable and balanced growth in the developing countries was retriggered by the 2008 global financial crisis. This paper aims to analyze 1) the impact of market openness on the economic growth and financial development, 2) the dynamic correlation between the compositional change in foreign investments and the returns of domestic financial markets, 3) the effect of foreign portfolio investment on the stock market activity (liquidity and profitability). Our empirical findings infer that the income level has a positive relationship with financial openness and the foreign portfolio investments cause price fluctuations in the domestic stock market. These results imply that the precautionary and effective policies such as prudential regulations on the short-term capital transactions are strongly needed to emerging markets in order to prevent the excessive fluctuations in the financial markets over the macroeconomic fundamentals.https://www.emerald.com/insight/content/doi/10.24006/jilt.2013.11.2.71/full/pdf |
| spellingShingle | Wonchang Jang Impact of Market Openness on Growth and Stability in Korea Journal of International Logistics and Trade |
| title | Impact of Market Openness on Growth and Stability in Korea |
| title_full | Impact of Market Openness on Growth and Stability in Korea |
| title_fullStr | Impact of Market Openness on Growth and Stability in Korea |
| title_full_unstemmed | Impact of Market Openness on Growth and Stability in Korea |
| title_short | Impact of Market Openness on Growth and Stability in Korea |
| title_sort | impact of market openness on growth and stability in korea |
| url | https://www.emerald.com/insight/content/doi/10.24006/jilt.2013.11.2.71/full/pdf |
| work_keys_str_mv | AT wonchangjang impactofmarketopennessongrowthandstabilityinkorea |