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EMU Effects on Stock Markets: From Home Bias to Euro Bias

  • Giofré, Maela/M.

The shift of perspective from a national basis to a Euro area basis, inevitably induced by EMU, has led member countries to a parallel shift from equity home bias to equity Euro bias. We interpret this evidence by means of a standard mean-variance portfolio selection model modified in order to include information asymmetries, considering the effect of the EMU integration process on equity markets through informational channels, real and financial. We find a stronger informational impact of the financial channel relative to the real channel in shaping EMU countries' equity portfolios after integration.

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File URL: https://mpra.ub.uni-muenchen.de/13926/1/MPRA_paper_13926.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 13926.

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Date of creation: May 2008
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Publication status: Published in International Research Journal of Finance and Economics 15 (2008): pp. 128-150
Handle: RePEc:pra:mprapa:13926
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