The Shrinkage after the Enlargement? The Effect of Financial Crises and Enlargement on Stock Market Integration in the Euro Area
International Journal of Economics and Finance, 14(3), 33-65, 2022.
33 Pages Posted: 10 Mar 2020 Last revised: 30 Mar 2022
The bilateral foreign portfolio equities among Euro area members have shrunk by 40 percent after 2007. While both the financial crisis and the enlargement are potentially responsible of this abrupt and persistent contraction in financial integration, our work detects a major role for the crisis. The deterioration of the control of corruption mechanisms in Euro periphery economies during the crisis is recognized as a potential driver of this shrinkage.
Keywords: stock market integration; common currency; EMU enlargement
JEL Classification: F21, F30, F36, G11, G15
Suggested Citation: Suggested Citation