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I indicate how MSV undermines the social conditions of innovative enterprise: strategic control, organizational integration, and financial commitment.

Financial Markets Part - 6, Stock Exchange and Its functions, Business Studies Class 12

Article By Institute Staff. Article By Lynn Parramore. Paper Conference paper By William Lazonick.

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Paper Conference paper By Edward Jung. Article By William Lazonick. Research We develop research that challenges economic orthodoxy and serves society. Education We develop resources for students and educators interested in exploring new economic thinking. Events To foster new economic thinking, we host convenings that gather together a diverse community of thinkers from different fields, countries, and schools of thought.

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For Media INET brings together more than Nobel laureates, scholars, policy minds and business leaders who are helping to shape economic thinking worldwide. Search Search. Mar 5, More from William Lazonick. Article By William Lazonick Nov 13, Stock Buybacks Hurt Workers and the Economy. We Should Ban Them. The following are some of the important functions of stock exchange. For more, refer this article: What are the functions of stock exchange? Stock exchanges help to discover fair prices for securities traded on them.

Role of Stock Exchange in Economic Development with reference to Pakistan

Continuous trading activity in stocks and debentures helps in ascertaining price of securities. Industrial development of a country depends on the availability of capital. Stock exchanges provide the required capital for investment in industries. Industries are assured of long term capital essential for industrial and economic development. Every listed company in a stock exchange has to file documents in the stock exchange such as annual returns, and provide information regarding plans to merge with or acquire other companies, change in management, plans to enter into new businesses.

This enables investors to plan their future investment based on information provided by the companies to the stock exchange. Stock exchanges enable optimum allocation of scare capital resources.

17 Important functions of a stock exchange

Capital is the life blood of all businesses. Stock exchanges aid in the allocation of capital to companies which are performing well and have potential for profitable growth in the future. This enables investors both in the urban as well in rural areas to become aware of stock market investment and make prudent investment decisions.

Stock exchanges play an important role in mobilizing savings of individuals and institutions.

Revision Notes

Savings so mobilized can be utilized to invest in various projects boosting industrial and economic development of a country. Companies which are listed in the stock exchanges have to comply with various rules and regulations. They have to submit various documents and returns and provide information regarding any important activity they plan to undertake. Stock exchanges have formulated regulations to ensure safety of investors funds.

Stock exchanges enable creation of new ventures. Any new venture requires financing. Stock exchanges are an important avenue for new ventures to raise capital for meeting their capital needs. The stock exchange has aided new venture creation by enabling promoters to raise the required funds. For e. The government requires funds to undertake various projects and government companies need funds for expansion, diversification etc.

The Central and State governments, municipal corporations, state financial corporations etc have raised crores through the issue of shares, bonds etc. Stock exchanges provide liquidity to investments made by investors. They serve as a platform where buyers and sellers of securities come into contact to buy and sell securities. Therefore any person who owns a security can sell his security in a stock exchange and convert into cash. Stock exchanges facilitate transfer of ownership of stocks, shares and securities.

Securities are regularly traded on stock exchanges which help both the buyers and sellers of securities. Stock exchanges enable public to share in the wealth created by the corporate sector. They help investors who are spread across the length and breadth to purchase securities issued by companies. Dividends , bonus shares and benefit of increase in share prices are enjoyed by investors. Industrial development depends on the availability of funds for investment.

How It Affects You, Even If You Don't Invest

Stock exchanges enable organizations to issue various types of securities according to their requirements and raise the necessary funds. Thus they aid in the economic development of a country. Stock exchanges aid in attracting foreign investment. They enable foreign institutional investors mutual funds, pension funds, hedge funds, corporate of other countries to invest in securities of Indian companies. Thus they provide an opportunity to companies to attract foreign investment.