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The Euro and Financial Market Integration

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  • HOSSEIN ASKARI
  • JOYDEEP CHATTERJEE

Abstract

One of the projected benefits of the euro was to be a unified capital market. The cost of capital would be lower and this, coupled with the larger market, would motivate large EU entities to satisfy their financing needs within the euro area. Our results support the expectation that the financial markets of the euro area countries would become more unified with a lowered cost of capital, especially for the less financially credible countries. It appears, however, that the benefit of a lower cost of capital has also accrued to the three EU countries that did not adopt the euro. Copyright Blackwell Publishing Ltd 2005.

Suggested Citation

  • Hossein Askari & Joydeep Chatterjee, 2005. "The Euro and Financial Market Integration," Journal of Common Market Studies, Wiley Blackwell, vol. 43(1), pages 1-11, March.
  • Handle: RePEc:bla:jcmkts:v:43:y:2005:i:1:p:1-11
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    Citations

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    Cited by:

    1. José G. Dias & Sofia B. Ramos, 2015. "An Analysis of Industry Regimes Synchronization in the Eurozone," Journal of Common Market Studies, Wiley Blackwell, vol. 53(2), pages 255-273, March.
    2. Dewandaru, Ginanjar & Rizvi, Syed Aun R. & Masih, Rumi & Masih, Mansur & Alhabshi, Syed Othman, 2014. "Stock market co-movements: Islamic versus conventional equity indices with multi-timescales analysis," Economic Systems, Elsevier, vol. 38(4), pages 553-571.
    3. Smimou, K. & Khallouli, W., 2015. "Does the Euro affect the dynamic relation between stock market liquidity and the business cycle?," Emerging Markets Review, Elsevier, vol. 25(C), pages 125-153.
    4. Dewandaru, Ginanjar & Alaoui, AbdelKader & Bacha, Obiyathulla & Masih, Mansur, 2014. "Stock Market Co-movement and Shock Transmission: Islamic versus Conventional Equity Indices," MPRA Paper 56888, University Library of Munich, Germany.
    5. Axel Grossmann & Emiliano Giudici & Marc Simpson, 2014. "Euro conversion and return dynamics of European financial markets: a frequency domain approach," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 38(1), pages 1-26, January.
    6. Smimou, K., 2011. "Transition to the Euro and its impact on country portfolio diversification," Research in International Business and Finance, Elsevier, vol. 25(1), pages 88-103, January.
    7. Smimou, K. & Khallouli, W., 2016. "On the intensity of liquidity spillovers in the Eurozone," International Review of Financial Analysis, Elsevier, vol. 48(C), pages 388-405.
    8. Dewandaru, Ginanjar & Alaoui, Abdelkader & Masih, A. Mansur M. & Alhabshi, Syed Othman, 2013. "Comovement and resiliency of Islamic equity market: Evidence from GCC Islamic equity index based on wavelet analysis," MPRA Paper 56980, University Library of Munich, Germany.

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