publication . Preprint . 2012

Financial Globalisation and Sectoral Reallocation of Capital in South Africa

Ziv Chinzara; Radhika Lahiri; En Te chen;
Open Access
  • Published: 27 Jun 2012
Abstract
The study examines the impact of financial globalisation on intra-sector and inter-sector firm level reallocation of capital in South Africa using panel data for the period 1991-2008. The measure of efficient reallocation of capital is based on the variation of firm's marginal returns to capital around the optimal level, while the measure of financial globalisation is constructed by tracing the financial reforms/restrictions that took place in South Africa since the 1970s. We find that financial globalisation is associated with a reduction of the dispersion of firms' marginal returns around their sectoral steady states suggesting that financial globalisation enh...
Subjects
free text keywords: Financial Globalisation, intra-sector/inter-sector reallocation of capital, efficient capital allocation, development, Tobin Q, jel:E22, jel:F2, jel:F36

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