Premium
US, UK and European Stock Market Integration
Author(s) -
Fraser Patricia,
Oyefeso Oluwatobi
Publication year - 2005
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/j.0306-686x.2005.00591.x
Subject(s) - diversification (marketing strategy) , stock market , economics , stock (firearms) , financial economics , market integration , monetary economics , currency , market depth , business , macroeconomics , marketing , mechanical engineering , paleontology , horse , engineering , biology
This paper examines long‐run convergence between US, UK and seven European stock markets. We report evidence to suggest that while real short‐run diversification gains may occur, in general they tend to be short‐lived. However we also find that US and UK markets are relatively less bound to a common trend, which would imply that increased stock market merger activity, and any transition to the European common currency by the UK, may lead to relatively large stock market adjustments as markets adapt to these institutional changes.