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Foreign direct investment and international stock market integration

Author

Listed:
  • Jing Shi

    (CRACM, School of Finance and Statistics, Jiangxi University of Finance and Economics, China, jing.shi@anu.edu.au, School of Finance, Actuarial Studies and Applied Statistics, The Australian National University, Australia)

  • Chris Bilson

    (School of Finance, Actuarial Studies and Applied Statistics, The Australian National University, Australia)

  • John G. Powell

    (Department of Economics and Finance, Massey University, New Zealand)

  • Julie Wigg

    (Department of Economics and Finance, Massey University, New Zealand)

Abstract

This paper examines whether foreign direct investment between countries fosters stock market integration. Empirical tests demonstrate that both the flow and the level of bilateral foreign direct investment between countries explain country-pair stock market integration. More specifically, higher bilateral foreign direct investment levels and flows increase Australia’s stock market integration with its major trade partners.

Suggested Citation

  • Jing Shi & Chris Bilson & John G. Powell & Julie Wigg, 2010. "Foreign direct investment and international stock market integration," Australian Journal of Management, Australian School of Business, vol. 35(3), pages 265-290, December.
  • Handle: RePEc:sae:ausman:v:35:y:2010:i:3:p:265-290
    DOI: 10.1177/0312896210384680
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    References listed on IDEAS

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    4. Maoliang Li & Ji Wu & Liansheng Zhang & Liping Zou, 2020. "Board reforms and the cost of equity: International evidence," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(5), pages 4497-4531, December.
    5. Alguacil, Maite & Martí, Josep & Orts, Vicente, 2023. "Firms’ characteristics and their international location strategy: Micro-level evidence from European countries," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 97-113.
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    8. Jessica Dye & Aaron Gilbert & Gail Pacheco, 2017. "Does integration lead to lower costs of equity?," Australian Journal of Management, Australian School of Business, vol. 42(1), pages 86-112, February.

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