重要因素。Many of the emerging economies have experienced liberalization of their capital markets
since the late 1980s, inducing massive amounts of capital inflow, and at the same time
giving rise to broad academic interest. Most of the prior studies on financial market
liberalization focus on the aggregate change in the cost of capital (Stulz, 1999; Bekaert and
Harvey, 2000; Henry, 2000a), little evidence is available on whether firm values are
increased and whether financial constraints are effectively lifted in the post-liberalization
period, at firm level. The importance of the firm-level corporate governance quality on
firm performances has been well documented in the literature. The better corporate
governance is highly correlated with better operating performance and market valuation.
To the best of our knowledge, few of these studies, if any, have examined how a firm’s
corporate governance structure would interact with the impact of financial market
liberalization. In the first year’s project, we examine the role of financial market
liberalization on the wealth effects. We find significant influences of corporate governance
on the effect of market liberalization events. Market responses to stock market and
announcements are more favorable and valuable for firms with better corporate governance.
Further, we find that firms with better corporate governance quality experience a greater
release of their financial constraint following the stock market and the banking sector
liberalization. Overall, we find that corporate governance is an important factor affecting
firm performances and their financial constraints after both the stock market and banking
liberalization in emerging markets.