ABSTRACT
Many emerging markets have embarked on a series of reforms in recent decades, including the liberalization of national stock markets. By 1999 there were at least 40 emerging stock markets in which foreigners could invest. Liberalization or openness of the stock market refers to a country’s decision to allow foreign investors to purchase shares in that country’s stock market (Bekaert and Harvey 2000; Henry 2000a and b). This can be accomplished via country funds, American Depository Receipts, or by direct purchase of shares in the local currency.
