Equity markets have not been a major driving force in the development process of Asia’s emerging economies. While established early this century, they only gained importance recently. Over the past five years, some of these markets reached the level of development (measured by the ratio of market capitalisation to GDP) achieved by mature markets in the US, Japan and Europe (see Figure 3.1 below). Most of them, however, still lack breadth and depth.
Little is known about emerging Asian equity market development in general, or about the factors that governed this development. Academic studies that specifically examine equity markets in emerging Asian economies are not numerous. Most literature relates to these markets only in the
Table 3.1 Market capitalisation
% of nominal GDP
Source: Data derived from tables in Appendix 1 , pp. 110-16