The Shrinkage after the Enlargement? The Effect of Financial Crises and Enlargement on Stock Market Integration in the Euro Area

69 Pages Posted: 10 Mar 2020 Last revised: 1 Apr 2020

See all articles by Maela Giofré

Maela Giofré

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

Oleksandra Sokolenko

University of Turin, Department of Economics and Statistics, Students

Date Written: February 21, 2020

Abstract

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 decline in economic development and institutional standards --in particular, the deterioration of the control of corruption mechanisms in Euro periphery economies during the crisis-- are recognized as drivers of this shrinkage.

Keywords: stock market integration; common currency; EMU enlargement

JEL Classification: F21, F30, F36, G11, G15

Suggested Citation

Giofré, Maela and Sokolenko, Oleksandra, The Shrinkage after the Enlargement? The Effect of Financial Crises and Enlargement on Stock Market Integration in the Euro Area (February 21, 2020). Available at SSRN: https://ssrn.com/abstract=3542470 or http://dx.doi.org/10.2139/ssrn.3542470

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

Oleksandra Sokolenko

University of Turin, Department of Economics and Statistics, Students ( email )

Torino
Italy

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