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Capital Mobility and the Origins of Stock Markets

Published online by Cambridge University Press:  09 July 2003

Daniel Verdier
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Abstract

I illustrate the accepted, though hardly researched, idea that political institutions play a role in locking in factor specificity across sectors, space, and borders. I use the emergence of modern capital markets in the nineteenth century, a process that threatened to redeploy financial resources away from land and traditional sectors to heavy industry, as a test case to ascertain the degree of domestic financial capital mobility in nine advanced industrialized countries. The main finding is that cross-national variations in financial capital mobility, holding constant the level of economic development, reflect the degree of state centralization.

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Articles
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International Organization , Volume 55 , Issue 2 , Spring 2001 , pp. 327 - 356
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Copyright © The IO Foundation 2001

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