Regional Integration of Stock Markets in Latin America

Journal of Economic Integration, Vol. 17, No. 4, pp.745-760, 2002

24 Pages Posted: 12 Dec 2000

See all articles by Richard Heaney

Richard Heaney

Australian National University

Vincent J. Hooper

Xiamen University

Martin Jaugietis

Towers Perrin - Australia Offices

Abstract

This paper examines the trend towards regionalism upon stock market returns in Latin America. Average correlations with other countries in the region and with the world suggest that the Latin American stock markets have become more regionally integrated over the study period. This finding reflects the growing cooperation between Latin American countries since liberalisation in the early 1990s. Prior to liberalisation, Latin American stock market returns showed greater association with the more developed markets, particularly the USA, than with their closest neighbour. This may have been due to the high dependence upon debt from these developed countries. Analysis highlights the importance of stock market data in helping researchers understand and monitor the regional integration process in Latin America.

Keywords: Latin America, regionalism, integration, stock market, rolling correlation, world market portfolio

JEL Classification: F36, G15

Suggested Citation

Heaney, Richard and Hooper, Vincent James and Jaugietis, Martin, Regional Integration of Stock Markets in Latin America. Journal of Economic Integration, Vol. 17, No. 4, pp.745-760, 2002. Available at SSRN: https://ssrn.com/abstract=251967 or http://dx.doi.org/10.2139/ssrn.251967

Richard Heaney

Australian National University ( email )

Canberra, Australian Capital Territory 0200
Australia
(+61) 6 2494726 (Phone)
(+61) 6 2495005 (Fax)

Martin Jaugietis

Towers Perrin - Australia Offices ( email )

Level 10
101 Collins Street
Melbourne, Victoria 3000
Australia
61-3-9270-8111 (Phone)

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