Do market capitalization and stocks traded converge? New global evidence

Paresh Narayan (), Sagarika Mishra and Seema Narayan ()

Journal of Banking & Finance, 2011, vol. 35, issue 10, 2771-2781

Abstract: In this paper, we examine convergence of stock markets. Our empirical exercise is based on 11 different panels, which together consist of 120 countries. The richness of the dataset allows us to disaggregate countries into panels, such as high income, middle income, low income, OECD, CSI, and developing country panels. In addition, we construct regional panels, such as those representing the Arab States, East Asia and the Pacific, South Asia, Latin America and the Caribbean, and Sub-Saharan Africa. Our main finding is that, based on the conditional convergence model, convergence of stock market capitalization and stocks traded is found for four panels, namely the high and low-income panels, the OECD panel, and the Sub-Saharan African panel. The speed of convergence is high, in most cases between 20% and 30%.

Keywords: Convergence; Stock; markets; Market; capitalization; Stocks; traded; Panel; data (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (427)

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Working Paper: Do market capitalisation and stocks traded converge? New global evidence (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:35:y:2011:i:10:p:2771-2781

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