Emeklilik fonları ve piyasa likiditesi: Gelişmekte olan ülkelerden dersler

In response to the financial crisis, there has been increased attention on the importance of the long-term investors for financial stability. We contribute to this literature by investigating the role of pension funds on stock market liquidity, using a data set covering 23 EM countries over the period 2004-2014. In particular, we focus on whether liquidity supply by pension funds are more pronounced in periods of market turbulence. We find strong evidence that pension funds, i) supply liquidity in stock markets, and ii) liquidity provision effect is stronger in financial crisis times. Our findings have key implications for both policymakers and global fund managers. As liquidity provision is an important function of financial markets both in general and periods of market stress, EM economies that are relying heavily on foreign investors should increase domestic and long-term investor base (pension funds) in their financial markets. Auto-enrollment reform may provide a viable solution to increase pension fund size in EM countries.