EMU Effects on Stock Markets: From Home Bias to Euro Bias

Giofré, Maela/M.
Authors registered in the RePEc Author Service: Maela Giofre' ()

MPRA Paper from University Library of Munich, Germany

Abstract: The shift of perspective from a national basis to a Euro area basis, inevitably induced by EMU, has led member countries to a parallel shift from equity home bias to equity Euro bias. We interpret this evidence by means of a standard mean-variance portfolio selection model modified in order to include information asymmetries, considering the effect of the EMU integration process on equity markets through informational channels, real and financial. We find a stronger informational impact of the financial channel relative to the real channel in shaping EMU countries' equity portfolios after integration.

Keywords: financial integration; portfolio choice; home bias; information asymmetries (search for similar items in EconPapers)
JEL-codes: F21 F36 G11 G15 (search for similar items in EconPapers)
Date: 2008-05
New Economics Papers: this item is included in nep-eec and nep-fmk
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published in International Research Journal of Finance and Economics 15 (2008): pp. 128-150

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:13926

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