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Towards an Unstable Hook: The Evolution of Stock Market Integration Since 1913

Author

Listed:
  • Cécile Bastidon

    (LEAD - Laboratoire d'Économie Appliquée au Développement - UTLN - Université de Toulon)

  • Michael Bordo

    (RU - Rutgers, The State University of New Jersey [New Brunswick] - Rutgers - Rutgers University System)

  • Antoine Parent

    (IEP Lyon - Sciences Po Lyon - Institut d'études politiques de Lyon - Université de Lyon, LAET - Laboratoire Aménagement Économie Transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique)

  • Marc Weidenmier

    (Chapman University)

Abstract

We examine equity market integration for 17 countries from 1913-2018. We use network analysis to measure the evolution of global stock market integration as well as stock market integration between and across countries. The empirical results suggest that long-run stock market integration looks like an unstable hook. Equity market integration first peaked in 1913 during the first era of globalization (1870-1913) when unfettered markets ruled the day. Integration declined over the next 60 years as countries experienced the Great Depression and shunned international capital markets. The end of the Bretton Woods system in the early 1970s ushered in the second period of globalization. Our empirical analysis suggests that stock market integration in the recent period of globalization has surpassed the first era of globalization in the last 10 years and currently has the highest level of equity market integration and network instability in world history.

Suggested Citation

  • Cécile Bastidon & Michael Bordo & Antoine Parent & Marc Weidenmier, 2019. "Towards an Unstable Hook: The Evolution of Stock Market Integration Since 1913," Working Papers halshs-03009753, HAL.
    • Handle: RePEc:hal:wpaper:halshs-03009753
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    Cited by:

    1. is not listed on IDEAS
    2. Rebecca Stuart, 2024. "Measuring stock market integration during the Gold Standard," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 18(1), pages 191-220, January.
    3. Laurent Gauthier, 2022. "Extending Cliometrics to Ancient History with Complexity," Working Papers hal-03754911, HAL.
    4. Cécile Bastidon & Antoine Parent, 2024. "Cliometrics of world stock markets evolving networks," Annals of Operations Research, Springer, vol. 332(1), pages 23-53, January.
    5. Laurent Gauthier, 2022. "Sophocles's Play: Greek Theater and Psychological Game Theory," Working Papers hal-03754913, HAL.

    More about this item

    Keywords

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    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative

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