Abstract: When evaluating emerging stock markets, analysts usually fit them into a model of corporate governance derived from Western industrial experience, one where shares are dispersed and shareholders influence firm management through the price mechanism, or one where shares are held in blocs and banks play a role. This book challenges this approach and the underlying assumptions, which are focused on economies at relatively high levels of development. It argues that the political dimension inherent in developing countries prevents the institutional formation of a price mechanism in corporate governance along Western lines. For these markets, stock is a political as well as an economic instrument that has negotiated the transitions associated with building and dismantling the state sector since the 19th century. The book begins with a historical overview of stock markets in developing countries and the international political circumstances that at times facilitated and at times hampered their growth. By focusing on the multiple possible connections between the ownership of shares of an individual firm and the control of rights attached to them, it details how those who wish to issue stock in emerging markets must comply simultaneously with the changing requirements of external actors and internal political constituencies. It then presents case studies of share issues from Latin America, Asia, Eastern Europe, and Africa, which build from the level of the firm, to the state, to the international system across the same time span. The book concludes with reflections on the role of equity finance in broader processes of privatization, development, and economic globalization.

Keywords: emerging markets, stock markets, equity finance, corporate governance, price mechanism, privatization, globalization, political circumstances, developing countries, development