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Routes to Equity Market Integration - The Interplay between Politicians, Investors and Managers

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Author Info
Oxelheim, Lars () (The Research Institute of Industrial Economics)
Abstract

Most econometric studies of equity market integration suggest that national markets are increasingly becoming part of a global equity market. As regards the extent of this integration, however, the results are often inconclusive. Further analysis calls for a closer scrutiny of the basic requirements for perfect integration. This paper presents an analysis of market segmentation in terms of existing regulatory and informational wedges, based on conditions in the Nordic welfare states. It is found that no barriers remain to cross-border equity market transactions, nor consequently to the perfect global integration of Nordic equity markets in a capital-flow perspective. However, certain residual cross-border tax wedges do challenge the view of perfect equity market integration. Further, continuing cross-border information gaps for small and medium-sized companies indicate the presence of a two-tier equity market integration.

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Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 526.

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Length: 35 pages
Date of creation: 09 Feb 2000
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Publication status: Published in Journal of Multinational Financial Management, 2001, pages 183-211.
Handle: RePEc:hhs:iuiwop:0526

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Related research
Keywords: Equity market integration Foreign equity issue Cross-listing

Find related papers by JEL classification:
F30 - International Economics - - International Finance - - - General
F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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  14. Errunza, Vihang & Losq, Etienne, 1985. " International Asset Pricing under Mild Segmentation: Theory and Test," Journal of Finance, American Finance Association, vol. 40(1), pages 105-24, March. [Downloadable!] (restricted)
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