European Parliament Library

Country Transparency and the Global Transmission of Financial Shocks, Luis Brandão-Marques, Gaston Gelos, Natalia Melgar

Abstract
This paper considers the role of country-level opacity (the lack of availability of information) in amplifying shocks emanating from financial centers. We provide a simple model where, in the presence of ambiguity (uncertainty about the probability distribution of returns), prices in emerging markets react more strongly to signals from the developed market, the more opaque the emerging market is. The second contribution is empirical evidence for bond and equity markets in line with this prediction. Increasing the availability of information about public policies, improving accounting standards, and enhancing legal frameworks can help reduce the unpleasant side effects of financial globalization
Table Of Contents
Cover; Contents; I. Introduction; FIGURES; Figure 1 - Change in Bond Spreads during Global Financial Crisis (Sept-Dec 2008); Figure 2 - Change in Stock Prices during Global Financial Crisis (Sept-Dec 2008); II. Model; III. Empirical Strategy and Variables; A. Empirical Models; B. Data; Returns; Global Factors; Transparency; Controls; IV. Results; A. Main Results; Bond Spreads; Equity Returns; Robustness and Additional Tests; B. Endogeneity; V. Conclusion; Appendix A - Model Details and Proofs; Appendix B - List of Countries Used in the Sample; References; TABLES
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (39 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781484360224

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