Capital Markets in Developing Countries

Johan Fredholm holds a MSc in IT and a MSc in Business
Administration and Economics. He is currently the
Regional Manager for NASDAQ OMX in Armenia. Benjamin Taghavi-
Awal holds a MSc in Business Administration and
Economics from Stockholm University. He is the founder of Mobikk
and works actively with start-ups in Telecom and IT.

This book presents the Capital Market Diagnostics
(CMD) model - a tool for evaluating the level of
development of a country''s capital market. The three
step model first looks at the necessary conditions
for a functioning capital market, such as security
and the rule of law. In the second step, factors
supporting the development of the capital market are
considered, based on the supply-demand relationship
between capital and investment opportunities. In the
third and final step the focus is on the
institutions of the capital market, and the model
provides checklists for the evaluation of these
institutions.
The book also describes a field study implementation
of the model, carried out in Georgia in 2006. This
field study provided an opportunity to test and
improve the model, but it also yielded a description
of the Georgian capital market and its specific
problems at that time.
In addition to this the book provides a research
overview of the relationship between financial
system development, capital markets and economic
growth. This overview is of value to anyone
interested in the role of capital markets in
developing countries.