market architecture of selected stock exchanges in ... - Gilles Daniel

2those in the developed world. While the latter all have an equity marketplace, only81 out of 155 emerging markets have equity markets, which are “small relative totheir economies with market capitalization at only 30-40% of GNP, as compared to70-80% of GNP in the developed markets” (Levich 2001, p.7) (see Figure 1).Figure 1: Equity Market Capitalization as a Percentage of National GNPSource: Levich (2001)However, the emerging equity markets 1 have grown significantly. Figure 2 showsthat within 20 years, the world equity market capitalization has grown from under$3,0 trillion in 1980 to over $36 trillion in 1999, the share of emerging markets hasgrown from around 3,1% to 8,5% in the same period (Levich 2001). Already in1995, 50% of all listed companies in the world were listed in emerging equitymarkets (Kumar and Tsetsekos 1999).1 According to the definition of the International Finance Corporation (IFC) in the Emerging StockMarkets Factbook 1996 (cited in Levich 2001), an emerging equity market is any stock market in adeveloping economy with potential to mature.