Does Regulatory Harmonization Increase Bilateral Asset Holdings?

Jonas Vlachos

No 612, Working Paper Series from Research Institute of Industrial Economics

Abstract: By combining new data on bilateral asset holdings with data on securities regulation in an empirical gravity model, it is found that bilateral differences in securities regulation lead to decreased portfolio holdings. Hence, regulatory harmonization can foster financial integration. The results are especially strong for equity holdings. It is verified that the results do not just reflect general economic, institutional, and cultural differences. Additional analysis of causality shows the exogenous component of asset holdings to be associated with larger differences in securities regulation. This might suggest that regulatory differences are used to protect domestic capital markets from outside competition.

Keywords: Cross-Border Portfolio Investments; Gravity Model; Harmonization; Home Bias; Integration; Securities Regulation (search for similar items in EconPapers)
JEL-codes: F21 F36 G15 G18 K22 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2004-03-05
New Economics Papers: this item is included in nep-com, nep-dev and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

Downloads: (external link)
https://www.ifn.se/Wfiles/wp/WP612.pdf (application/pdf)

Related works:
Working Paper: Does Regulatory Harmonization Increase Bilateral Asset Holdings? (2004)
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:hhs:iuiwop:0612

Access Statistics for this paper

More papers in Working Paper Series from Research Institute of Industrial Economics Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Elisabeth Gustafsson ().