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

35 Pages Posted: 30 Aug 2007

See all articles by Lars Oxelheim

Lars Oxelheim

Research Institute of Industrial Economics (IFN); University of Agder; Lund University

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.

Keywords: Equity Market Integration, Foreign Equity Issue, Cross-Listing

JEL Classification: F30, F36, G15, G18, G38

Suggested Citation

Oxelheim, Lars, Routes to Equity Market Integration - The Interplay between Politicians, Investors and Managers. Journal of Multinational Financial Management, Vol. 11, No. 2, 2001, Available at SSRN: https://ssrn.com/abstract=1010644

Lars Oxelheim (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

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University of Agder ( email )

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Norway

Lund University ( email )

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