Nascent markets: Understanding the success and failure of new stock markets

We study the success and failure of 59 newly established (“nascent”) stock markets since 1975 in their first 40 years of activity. Nascent markets differ markedly in their success, as measured by number of listings, market capitalization, and trading activity. Long-term success is in part determined by early success: a high initial number of listings and trading activity are necessary, though not sufficient, conditions for long-term success. Banking sector development at the time of establishment and development of national savings over the life of the stock market are the other two most reliable predictors of success. We find little evidence that structural factors such as country size or legal and political institutions matter. Rather, our results point to an important role of banks, demand factors, and initial success in fostering long-term stock market development. 

CEPR Working Paper No. DP11604



34th Symposium on Money, Banking and Finance

Paris Nanterre, France

American Economics Association (AEA) Annual Meeting 2017

Chicago, USA

International Organization of Securities Commissions (IOSCO)

Madrid, Spain

European Finance Association (EFA) Annual Meeting 2016

Oslo, Norway​​


World Bank blog

MeJudice blog

Oxford Business Law blog

The Economist

VOXEU column

Do index funds' family ties benefit the firms they own?

I investigate the impact of ties between index and non-index funds within the same mutual fund family on the value of firms in which both funds invest. Theoretically, I show that family ties increase non-index funds’ incentives to purchase additional shares and monitor a firm. This is because non-index funds are more likely to be able to influence management when index funds in the same family hold the same firm. Empirically, using exogenous variation in family ties following a firm’s addition to an index, I show that family ties are associated with higher non-index fund ownership. Furthermore, firms held by funds with family ties are more profitable and have higher valuations. The effect of family ties on valuation is larger for “dedicated” fund-firm relations and for firms in highly innovative industries, for which the potential gains from monitoring are the highest ex-ante.

SSRN Working paper No. 3059128



Financial Management Association (FMA) Annual Meeting 2019, New Orleans, USA

Financial Management Association (FMA) Annual Meeting 2017, Boston, USA

The political consequences of financial market development: Evidence from the opening of African stock exchanges

with Mathijs A. van Dijk

Work in Progress


Conference: Politics, Stock Markets and the Economy

University of South Australia, Adelaide, Australia




Helleveien 30, 5045 Bergen, Norway



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