Financial integration in small Islands: The case of Cyprus
Mehmet Balcilar (),
Ali Kutan () and
International Review of Economics & Finance, 2017, vol. 47, issue C, 201-219
The following paper assesses the degree to which two small island economies, the Republic of Cyprus (RC) and the Turkish Republic of Northern Cyprus (TRNC), are financially integrated with their respective ‘motherlands’ of Greece and Turkey. Specifically, we investigate whether there is a long-run relationship between the RC and Greece and between the TRNC and Turkey, in terms of inflation, interest rates, money supply, and foreign direct investment (FDI). The paper contributes to the literature by examining financial integration in the unique case of Cyprus, where two separate, small economies each operate in a monetary union with their respective mainland partners. The results of our analysis indicate the strong integration of the financial markets of the TRNC and Turkey, and of the RC and Greece. We also demonstrate that financial-market indicators in the TRNC and the RC are largely driven by mainland-partner economies, further advancing the literature on financial integration.
Keywords: F17; F36; C32; Financial integration; Cyprus; Greece; Turkey; Turkish Republic of Northern Cyprus (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:47:y:2017:i:c:p:201-219
Access Statistics for this article
International Review of Economics & Finance is currently edited by H. Beladi and C. Chen
More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().