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Notes
- Abstract:
- Efficient financial institutions, specifically equity markets, play an integral role in the development of a country economically. This is especially true in frontier nations. Equity markets provide the infrastructure to link savers of capital with users and mobilize foreign capital for investment. Without effective equity markets, it becomes more expensive for local companies to expand and it deters international investment from entering the country. In some cases, indigenous companies are forced to raise capital on international markets and lose domestic control. The following paper utilizes two approaches to determine market efficiency in the countries of Trinidad and Tobago, Jamaica and Barbados. The first approach, cross listing analysis, measures efficiency by the price variations in cross-listed companies. If efficient and socially just, shares to the same claim in equity should be equally priced on all markets. The second approach, analysis of stock market valuations, consists of statistical analysis on the main market indices of each country. If efficient, pricing and volatility should follow a random walk. Results demonstrate that cross-listed companies have consistent and large price variations between markets. In addition, both pricing and volatility do not follow a random walk. It can be concluded that the three frontier markets of Trinidad and Tobago, Jamaica and Barbados are inefficient. Trinidad and Tobago, the largest market by capitalization and usually trade volume, is the most efficient and appears to be the only market increasing in efficiency according to the cross-listing analysis results. This is consistent with expectations that larger and more liquid markets have greater efficiency.
- Thesis:
- Thesis (Honors)--Barry University, 2012.
- Bibliography:
- Includes bibliographic references (leaves 60-62).
Record Information
- Source Institution:
- Barry University
- Holding Location:
- Barry University Archives and Special Collections
- Rights Management:
- Copyright Sean Cooney. Permission granted to Barry University to digitize, archive and distribute this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder.
- Resource Identifier:
- HC151 .C88 2012_CooneySean ( BU-Local )
- Classification:
- HC151 .C88 2012 ( lcc )
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