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Deep Financial Integration and Volatility

Sebnem Kalemli-Ozcan (), Bent Sorensen and Vadym Volosovych ()

No 15900, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We investigate the relationship between financial integration and output volatility at micro and macro levels. Using a very large firm-level dataset from EU countries over time, we construct a measure of "deep" financial integration at the regional level based on foreign ownership at the firm level. We find a positive effect of foreign ownership on volatility of firms' outcomes. This effect survives aggregation and carries over to regional output. Exploiting variation in the transposition dates of EU-wide legislation, we find that high trust regions in countries who harmonized capital markets sooner have higher levels of financial integration and volatility.

JEL-codes: E32 F15 F36 O16 (search for similar items in EconPapers)
Date: 2010-04
New Economics Papers: this item is included in nep-bec, nep-eec, nep-ifn and nep-mac
Note: CF IFM ITI PR
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Published as Sebnem Kalemli-Ozcan & Bent Sorensen & Vadym Volosovych, 2014. "Deep Financial Integration And Volatility," Journal of the European Economic Association, European Economic Association, vol. 12(6), pages 1558-1585, December.

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Related works:
Journal Article: DEEP FINANCIAL INTEGRATION AND VOLATILITY (2014) Downloads
Working Paper: Deep Financial Integration and Volatility (2010) Downloads
Working Paper: Deep Financial Integration and Volatility (2010) Downloads
Working Paper: Deep Financial Integration and Volatility (2010)
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