Globalization and Liquidity Movements in BRICS

Cross-listing was a high trend in the end of 20th century, is this route of development now lowering and why? How does globalization influence cross-listing decision and liquidity allocation between foreign and home markets? What are the factors influencing liquidity at home and abroad? The empirical evidence of the study has shown that for BRICS countries there is a trend of liquidity come back from the global markets to local exchanges as home markets become more liquid, of larger size, integrated and more protected. Much influence is produced by local markets liquidity. Therefore, firms, from the markets which are expecting to internationally integrate soon, would suffer from diminishing foreign liquidity. In addition, local market size and GDP growth have shown a positive relation with home stock liquidity, so, domestic market and country growth will accompany market integration effects and increase liquidity of stock at home exchanges. Besides, legal and political development play a role in liquidity of traded instruments, while investor protection regulations increase the liquidity abroad and at home, political stability have a positive effect on liquidity at home market.