s: This paper looks at ownership restrictions toward international investors in emerging stock markets and its impact on the degree to which they move with more mature markets. Surprisingly, the results show that while emerging markets are positively correlated with industrial markets, the strength of such market comovement is weakened by lower levels of capital restrictions, implying the role ...

We introduce intermediation frictions into a Lucas (1978) asset pricing model in order to study the effects of low capital in the intermediary sector on asset prices. Our model shows that low intermediary capital can increase risk premia, Sharpe ratios, volatility and comovement among intermediated assets. Reductions in intermediary capital also lead to a flight-to-quality in which intermediari...

While illicit capital flight is a major concern of policymakers in developing countries, there only little research on the possible link between and development aid. In this paper, we address issue for Nepal, stereotypical financially closed economy that highly dependent resources from abroad. Distinguishing features our approach are use narrowly defined proxy flight, based trade cost-adjusted ...