Financial liberalization in Thailand: Impact on the Growth and Volatility of foreign investment in stock market and the stock market
Abstract: Financial liberalization has been recognized as a driver of economic growth; since it aims to increase foreign investment in a particular country. Historically, financial liberalization has affected the economic growth, investment, and consumption of a country. Thailand introduced financial liberalization in the late 1980s and has increased this model over time. This study investigates the impact of financial liberalization on foreign investments and stock markets while taking into account the changing nature and volatility of foreign investment in the Thai stock market and the Thai stock market. The paper discusses liberalization during two periods: after the Asian crisis of 1997 and in 2000 during the financial institutions’ recovery plan. Thailand has shown an upswing in foreign investment and an enhanced stock market index but higher volatility of the stock market and foreign investment since the country’s financial liberalization. However, the volatility of foreign investment and the stock market index still showed no significant change in the country’s finances.
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