Finance Market and Currency Union Integration in the Americas, with Regard to Foreign Corporate Activity on the American Stock Markets

81 Pages Posted: 3 Jun 2010

See all articles by Kevin Sleem

Kevin Sleem

University of North Florida

Date Written: June 3, 2010

Abstract

The purpose of this study is to provide a contribution to the analysis of foreign cross-listing behaviour in general, and on the state of the integration of the American region's capital markets and economies in specific; while also examining the market preferences of U.S. firms in the Americas and around the world; as well as analysing the role of the growth and integration of the Mexican stock exchange into the American financial markets in regard to the 2008 credit crisis and in general. A logistic regression model based on Piotroski and Srinivasan's 2008 study is developed which takes into consideration exchange, firm, geographic, and industrial regressors in order to determine whether firms prefer listing on the New York Stock Exchange as compared to the Toronto Stock Exchange. Logistic regressions are also run on foreign corporations operating in Bermuda, Mexico and Brasil. Unit-root causality tests and ARCH regressions are run on the economy and stock exchange characteristics of the American economies to analyse currency union and finance market integration possibilities. The American economies are more integrated than their stock exchanges, though due to the fact that currency unions are much more political than stock market mergers, it is suggested that stock markets in the Americas will continue to integrate with a greater propensity than currency unions.

Keywords: Finance Markets, Integration, Americas, Stock Markets, Currency Unions, Foreign Corporations

JEL Classification: E20, F02

Suggested Citation

Sleem, Kevin, Finance Market and Currency Union Integration in the Americas, with Regard to Foreign Corporate Activity on the American Stock Markets (June 3, 2010). Available at SSRN: https://ssrn.com/abstract=1619914 or http://dx.doi.org/10.2139/ssrn.1619914

Kevin Sleem (Contact Author)

University of North Florida ( email )

4567 St. Johns Bluff Road, South
Jacksonville, FL 32224-2645
United States

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