Whyhasthe.docx

Whyhasthe.docx

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Whyhasthe

Whyhasthe……

　　题目：

Whyhastheglobalcapitalmarketgrownsorapidlyinrecentdecades?

Willthisgrowthcontinuethrou

DictionaryofBusinessdefinesthecapitalmarketasamarketinwhichlong-termcapitalisraisedbyindustryandcommerce,thegovernment,andlocalauthorities.Themoneycomesfromprivateinvestors,insurancecompanies,pensionfunds,andbanksandisusuallyarrangedbyissuinghousesandmerchantbanks.Stockexchangesarealsopartofthecapitalmarketinthattheyprovideamarketforthesharesandloanstocksthatrepresentthecapitalonceithasbeenraised.Itisthepresenceandsophisticationoftheircapitalmarketsthatdistinguishestheindustrialcountriesfromthedevelopingcountries,inthatthisfacilityforraisingindustrialandcommercialcapitaliseitherabsentorrudimentaryinthelatter.

Theglobalcapitalmarkethasgrownsorapidlyinrecentdecades.SoIwouldliketodiscussaboutitintheessay.

Thisessayisorganizedasfollow,introduction,body,conclusion.Inthebodypart,Section1showswhyhastheglobalcapitalmarketgrownsorapidlyinrecentdecades.Section2talksaboutthecontinuanceofthegrowththroughoutthe2000s.

Body

1.Whyhastheglobalcapitalmarketgrownsorapidlyinrecentdecades

Inrecentdecades,theglobalcapitalmarkethasgrownsorapidlybecauseoftheriseofprivatizationsmainly.Withprivatecapitalflowsrisingfromlessthan5percentofworldGDPin1975toabout20percenttoday,privatizationshavesignificantlyincreasedmarketliquidity.Andalsoprivatizationtakesapotentialroleglobalcapitalmarketdevelopment.

A.TheRiseofCapitalMarket-BasedFinance

Capitalmarket-basedfinancehasinfactbeenincreasinginimportance,bothabsolutelyandrelativetofinancialintermediary-basedfinance,inbothdevelopedanddevelopingcountriesoverthepastdecade.Andalsocapitalmarketsareinfactwinningthepresentandseemlikelytodominatethefutureofcorporatefinanceindevelopedanddevelopingcountriesalike.

a.TheStableRoleofCommercialBankinginModernEconomies

Ordinary"relationshipbanking"appearstobe（atbest）holdingitsownasasourceofcorporatefinancingaroundtheworld,andismorelikelyindecline.Thebitsofbankingthataregrowingrapidlyarethosepartsthatprovidehighvalue-addedproducts（especiallyriskmanagementtools）andprovidelarge-scalesyndicatedcreditstocorporateborrowers.Duringthelate-1980sandearly-1990s,whenJapanandGermanyappearedtobeoutperformingmajorcapitalmarket-orientedcountriessuchasBritainandtheUS,theacademicliteratureoftenfavoredbank-basedsystems.Examplesof thisliteratureincludeProwse（1992）,Kester（1992）,andPorter（1992）,whilethesupportingargumentsaresummarizedinMaherandAndersson（1999）andTsuru（2000）.Morerecently,however,theweightofopinionhasswungstronglyinfavoroftheideathatcapitalmarketshavedecisivecomparativeadvantagesoverbanksandotherfinancialintermediariesasoptimalmonitorsandfinanciersofanation‘scorporatelife.Thisreassessmenthasbeendriveninpartbytheobservation,discussedatlengthabove,thatcapitalmarketshavebeenprosperingrelativetobanksformany;yearsnow.Therepetitivenature--andmassivecosts--ofbankingcrisesindevelopinganddevelopedcountriesalikehasalsoconvincedmanyobserversthatbanksareinherentlyfragileinstitutions,whoseroleincorporatefinanceshouldbeminimizedasmuchandasquicklyaspossible（Economist（1997,1999））.

b.TheRapidGrowthinStockMarketCapitalizationandTradingVolumeSince1983

From1983to2000,thiswasaperiodofveryrapidgrowthinthecapitalizationofmarketsineverycountryexceptJapan.Totalworldmarketcapitalizationincreasedoverten-fold（to$　trillion）between1983and1999,andthetotalcapitalizationoftheUSmarketincreasedalmostnine-fold（from$　trillionto$　trillion）overthesameperiod.

c.TheDramaticGrowthinSecuritiesIssuanceVolumeSince1990

Anotherwayofmeasuringtheriseofcapitalmarketsistoexaminewhethertheirshareofannualcorporatefinancingactivityhasgrownrelativetothatofothersourcesoffunding.SecurityofferingsbyUSissuersaccountedfortwo-thirdsoftheglobaltotalthroughout1990-1999,thatimpliesthatnon-USsecuritiesissuesincreasedfrom$191billionin1990to$750billionin1998,andthento$　trillionin1999.Thesurgeinnon-USissuancevolumein1999waslargelyduetothepopularityofeuro-denominatedbondissues,whichactuallyexceeded dollar-denominatedbondissuesformuchof1999.

d.ThePhenomenalGrowthinVentureCapitalFinancingintheUnitedStates

Onehighlyspecialized,butextremelyimportanttypeoffinancinghasalsogrownveryrapidlyoverthepastdecade,andespeciallysosince1997.ThisisventurecapitalinvestmentbyUSventurecapitalpartnerships.Thefund-raisingpatternsoftheseprivateequityinvestorsarediscussedinGompersandLerner（1998）,andthecompetitiveadvantagesofUSventurecapitalistsversusthoseinotherdevelopedcountriesaredescribedinBlackandGilson（1998）.

e.TheSurgeinMergersandAcquisitionsWorldwide

Thealmostincredibleincreaseinthetotalvolumeofmergerandacquisitionactivitythathasoccurredsince1990.WhiletakeovershavealwaysplayedanimportantroleintheUnitedStates,theriseinM&A（MergerandAcquisition）activityinEuropeduringthe1990swasevenmoredramatic.Fromlessthan$50billionannuallyinthelate-1980s,thetotalvalueofM&AinvolvingaEuropeantargetreached$592billionin1998,beforemorethandoublingto$　trillionin1999--rivalingtheUStotal.TheglobalvalueofM&Aactivityin1999reached $　trillion,anastounding10%ofworldGDP.

NextIwilldocumentthatshareissueprivatizationshavetrulytransformedshareownershippatternsofinvestorsinmanydifferentcountries.

B.Privatization‘sImpactonStockandBondMarketDevelopment

Weshouldbecarefulininferringcausationregardingprivatization‘simpactonmarketgrowth,sinceashiftinideologyorsomeotherexogenouspoliticaloreconomicchangemighthavecausedboththeprivatizationandtheoverallboom.

a.TotalProceedsRaisedbyPrivatizationPrograms

Itisclearthatnationalgovernmentshavebeenamongthebiggestwinnersfromprivatizationprograms,sincethesehavedramaticallyincreasedgovernmentrevenues,whichisclearlyonereasonthepolicyhasspreadsorapidly.Asmentionedabove,PrivatisationInternational[Gibbon（1998,2000）]reportsthatthecumulativevalueofproceedsraisedbyprivatizinggovernmentsexceeded$1trillionsometimeduringthesecondhalfof1999.Asanaddedbenefit,thisrevenuehascometogovernmentswithouthavingtoraisetaxesorcutotherpublicservices.

b.Privatization‘sImpactonInternationalInvestmentBanking

Allinternationalinvestmentbankscompetefiercelyforshareissueprivatizationmandates,fortwoprincipalreasons.First,becausetheofferingsaresolargeandsovisible--andarealmostalwaysdesignedtohelppromotethemarket‘scapacitytoabsorbsubsequentstockofferingsbyprivatecompanies--theseareveryprestigiousmandates.Todate,thelargeUSandBritishbrokeragehouseshavehadthemostsuccessinwinningadvisoryandunderwritingmandates,thoughallcountriesthatlaunchlarge-scaleSIPprogramstendtofavorlocalinvestmentbanksas"nationalchampions"to handlethedomesticsharetranche.ThesecondreasonbankscompetesofiercelyforSIPmandatesisbecausetheycanbeextremelyprofitable.Inspiteofthefact--documentedbyJones,etal（1999）andLjungqvist,etal（2000）--thatSIPshavesignificantlylowerunderwritingspreadsthanprivatesectorofferings,theirsheersizeandlackofdownsidepriceriskmakethemverylucrativeforunderwriters.

2.Willthisgrowthcontinuethroughoutthe2000s?

Asweindicatedabove,theglobalcapitalmarkethasgrownsorapidlyinrecentdecadescauseoftheprivatizationsrise.Privatizationsincreasedthemarketliquidity.Nowwehavealreadysteppedintothe21stcentury.Ibelievethatthegrowthwillcontinueforthefollowingreasons.First,mostofthesouth-eastAsiacountrieshaverecoveredfromthe1997financialcrisis.Forthesecountries,theynowhavethecapitaltodobusinesses.Andtheygetbackonthefastgrowingtrack.Second,bytheendof2001,world‘sbiggestdevelopingcountry,China,has;enteredtheWTO（WorldTradeOrganization）.Thisisrealgreatnews.Asweallknow,today‘sChinatakesaseriouspositioninworld‘seconomy.ItsinnovationandopeningpolicymakechinakeepachievinghighGDPgrowthrate.Thisdrivestheglobalcapitalmarketkeepgrowing.

SummaryandConclusions

Thisessayexaminestheimpactofshareissueprivatizations（SIPs）onthegrowthofworldcapitalmarkets（especiallystockmarkets）.Ibeginbydocumentingtheincreasingimportanceofcapitalmarkets,andthedecliningroleofcommercialbanks,incorporatefinancialsystemsaroundtheworld.Ithenshowthatprivatizationprograms--particularlythoseinvolvingpublicshareofferings--havehadadramaticimpactbothonthedevelopmentofnon-USstockmarketsandontheparticipationofindividualandinstitutionalinvestorsinthosestockmarkets.

Thishastoldthereasonofthefastgrowthofglobalcapitalmarket.AndthenIsuccinctlyindicatedthecontinuanceoftherapidgrowth,thegreatfuture.

Thelastbutnottheleastistherecommendation.Icanconfidentlyassertthat,ifexecutedproperly,aseriesofshareissueprivatizationscanindeedpromotethegrowthofglobalcapitalmarket,whichwillyieldeconomicandpoliticaldividendsfor