Stock Exchange Consolidation and Cross-Border Investment: An Empirical Assessment

71 Pages Posted: 17 Jan 2017 Last revised: 21 Dec 2020

See all articles by Maela Giofré

Maela Giofré

University of Turin - Department of Economics and Statistics; CeRP-CCA; Netspar

Date Written: September 1, 2017

Abstract

This paper investigates the effects of stock exchange consolidation on foreign portfolio holdings. Sharing a common stock exchange platform enhances cross-border investments, and the consolidation effect is particularly pronounced among member countries that are smaller in size and closer in geographical, cultural and economic terms. These findings survive different econometric specifications and outlier treatments. After accounting for endogeneity of the consolidation process, the effect of exchange consolidation on cross-border investment is confirmed.

Keywords: Stock Exchange Consolidation, International Portfolio Investments, Familiarity and Gravity Factors, Financial Regulation

JEL Classification: G11, G15, G30

Suggested Citation

Giofré, Maela, Stock Exchange Consolidation and Cross-Border Investment: An Empirical Assessment (September 1, 2017). Asian Finance Association (AsianFA) 2018 Conference, Available at SSRN: https://ssrn.com/abstract=2899436 or http://dx.doi.org/10.2139/ssrn.2899436

Maela Giofré (Contact Author)

University of Turin - Department of Economics and Statistics ( email )

Lungo Dora Siena 100/A
Torino, Turin - Piedmont 10153
Italy

CeRP-CCA ( email )

Via Real Collegio 30
Moncalieri (TO), Turin 10024
Italy

Netspar ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

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