THE PATTERNS OF EU STOCK MARKETS. IS THERE A SIGN OF CONVERGENCE?

Muresan Diana ()
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Muresan Diana: Babeº-Bolyai University, Faculty of Economics and Business Administration, Department of Accounting and Audit, Department of Economics, Cluj-Napoca,

Annals of Faculty of Economics, 2013, vol. 1, issue 1, 1250-1265

Abstract: This paper offers a preliminary analysis regarding the convergence of European stock markets. The sample consists of all 27 countries of European Union split in seven sub-groups related to income level, euro adoption and development level. The patterns analysed through this article are an important indication of expected convergence in EU stock markets. This study analyses the evolution and the trend of market capitalization and stocks traded and their correlation with some important determinants, namely inflation, capital formation, enrolment years, trade, FDI, government debt. Results show a negative correlation between initial level of market capitalisation and its growth rate and also of initial level of stocks traded and its growth rate. These results could be a sign of absolute convergence. Further research in this area is needed to see if there exists conditional convergence when heterogeneity among individuals is controlled for.

Keywords: market capitalization; stocks traded; convergence; stock markets; EU (search for similar items in EconPapers)
JEL-codes: G15 G30 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:ora:journl:v:1:y:2013:i:1:p:1250-1265

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