liberalization: the case of the Middle East and the Gulf Region countries.
Rana Al-Bahsh
1
CR2M, University of Montpellier
Abstract
In my research, I try to examine disciplines known in earlier researches as topics influenced by
economic liberalization process like capital structure, disclosure and transparency on a sample of
emerging markets. Does financing behavior of this sample of emerging markets differ from that in
developed ones? What are the factors that have an important role on corporate capital structure in
these markets? Does political risk level have a significant effect on corporations’ financing options?
Do certain steps taken by these economies towards integration with the world market like the issues
of disclosure, investor rights, and law enforcement have an effect on the market performance and
stock valuation?
The importance of this research is in its sample as well as in the period of the study. The Middle East
has always been rated as highly risky region, especially politically, but this region has also been a
target for investors both hedgers and risk takers. Also in late years countries in the Middle East and
the Gulf region have adopted strategies to liberalize their economies as they recognized the
importance of integrating into the world market. These influence of these strategies on corporate
financing behavior needs to be inspected, to my knowledge; there are few researches, if any, on
these topics that cover this region in recent years.
Professor Patrick SENTIS and I have conducted a research entitled: Determinants of capital structure
in Gulf Region states and Egypt. A brief about the research follows through the text of this paper.
1
Rana Al-Bahsh - yahyabaraa@gmail.com, (033) 642 409 950, address: 123 Rue Nivose, apt: 1, Montpellier,
43000 2
1-Introduction.
a-Liberalization:
Much has been learned about emerging markets finance over the past 20 years. These markets
have attracted a unique interdisciplinary interest that bridges both investment and corporate
finance with international economics, development economics, law, demographics and
political science. The designation ‘emerging market’ is associated with the World Bank. A
country is deemed ‘emerging’ if its per capita GDP falls below a certain hurdle that changes
through time. Of course, the basic idea behind the term is that these countries ‘emerge’ from
less-developed status and join the group of developed countries. In development economics,
this is known as convergence. History is important in studying these markets. Paradoxically,
many complain about the lack of data on emerging markets. This is probably due to the fairly
short histories available in standard databases. The International Finance Corporation’s
Emerging Market Database (EMDB) provides data from only 1976.
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