Introduction

Since the 1980s, stock markets have emerged as a key financial infrastructure in the global economy and as important drivers of economic growth (). Between 1978 and 2020, the number of listed companies tripled from 13,712 to 43,248 while their market capitalization increased from 23.1 per cent to 134.6 per cent of global GDP (). The spread of capital markets changed how corporate governance, financing, and ownership of companies functions globally and is central to financialization processes that have engulfed not only the core but also the periphery of the global economy (). While in 1978 only 9 per cent (1,257) of listed companies were from non-high income countries, 39 per cent (16,870) Lavelle, 2004World Bank, 2021Bonizzi, 2013of these companies are listed in emerging/developing economies by 2020.

Stock markets are crucial intermediaries that structure national financial systems’ integration into the global financial system (). Importantly, they essentially act as catalysts, potentially serving both as a source of subordination as well as statecraft for these emerging markets. On the one hand, stock markets can exacerbate financial subordination (). By enabling easy access for global institutional investors, they contribute to subsuming countries to the vagaries of global capital flows (). On the other hand, they can curtail the power of global capital and states can organize markets in ways that direct market outcomes towards certain state objectives and policies (Petry, 2020bBonizzi and Kaltenbrunner, 2018Naqvi, 2019Chen and Rithmire, 2020), hence facilitating financial statecraft. This chapter argues that whereas stock markets in more neoliberal financial systems are more likely to suffer from the adverse effects of international financial subordination, more state-capitalist financial systems offer the possibility of increasing resistance and exercising statecraft through stock markets (despite global financial hierarchy).