Another history of global financial markets: Local stock market integration since 1913 from a network perspective

Cécile Bastidon (), Michael Bordo, Antoine Parent and Marc Daniel Weidenmier

The World Economy, 2023, vol. 46, issue 8, 2456-2477

Abstract: We examine local and global equity market integration since 1900 using network methods. The analysis uncovers a new stylised fact about equity market integration over the past 120 years. Local equity market integration generally increases over the entire sample period. This finding is at odds with much of the existing literature that describes long‐run market integration as following a U‐shape pattern. Global stock market integration peaks in 1913 followed by disintegration during the Great Depression and Bretton Woods periods. Then it rebounds and achieves the highest level of integration during the recent period of globalisation that began in the early 1970s. We argue that this U‐shape pattern is the by‐product of the interaction of the network effects of the monotonic decrease in local distances (decrease in information costs, accelerated in the past decades) and network connectivity (which varies inversely with the control over international financial transactions).

Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/twec.13379

Related works:
Working Paper: Another history of global financial markets: Local stock market integration since 1913 from a network perspective (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:worlde:v:46:y:2023:i:8:p:2456-2477

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0378-5920

Access Statistics for this article

The World Economy is currently edited by David Greenaway

More articles in The World Economy from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().