Opening a stock exchange

A large body of theoretical and empirical literature has established a positive relationship between levels of stock market development and economic growth. However, previous empirical work has been based on samples of approximately 40 countries with the most highly developed financial systems. Since 1950, over 70 countries have opened their first national stock exchanges. Can such exchanges increase economic growth? I present a data set of my construction that describes the exchange openings that occurred between 1960 and 1998, and find that these exchanges have generated increases in growth during their first 5 years of existence, although the longer-term results are ambiguous. (C) 2008 Elsevier B.V. All rights reserved.