Why is stock market concentration bad for the economy?

• 成果类型: Article
• 署名作者: Bae, Kee-Hong; Bailey, Warren; Kang, Jisok
• 署名单位: York University - Canada; Cornell University; Fudan University; Fudan University; University System of Ohio; John Carroll University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2021.01.002
• 发表日期: 2021
• 关键词: Stock market concentration; capital allocation; IPO; INNOVATION; Economic growth

摘要

The stock market should fund promising new firms, thereby breeding competition, innovation, and economic growth. However, using three decades of data from 47 countries, we show that concentrated stock markets dominated by a small number of very successful firms are associated with less efficient capital allocation, sluggish initial public offering and innovation activity, and slower economic growth. These findings are robust to alternative sample periods, econometric specifications, and competing explanatory variables. Our evidence is consistent with the paradox that the capital market of a competitive economy can impede the continuing competitiveness of that economy. (C) 2021 Elsevier B.V. All rights reserved.