Working Paper Series,
Research Institute of Industrial Economics

Abstract: Most econometric studies of equity market integration suggest that national markets are increasingly becoming part of a global equity market. As regards the extent of this integration, however, the results are often inconclusive. Further analysis calls for a closer scrutiny of the basic requirements for perfect integration. This paper presents an analysis of market segmentation in terms of existing regulatory and informational wedges, based on conditions in the Nordic welfare states. It is found that no barriers remain to cross-border equity market transactions, nor consequently to the perfect global integration of Nordic equity markets in a capital-flow perspective. However, certain residual cross-border tax wedges do challenge the view of perfect equity market integration. Further, continuing cross-border information gaps for small and medium-sized companies indicate the presence of a two-tier equity market integration.

Keywords: Equity market integration; Foreign equity issue; Cross-listing

JEL-codes: F30; F36; G15; G18; G38

Language: English

35 pages, February 9, 2000

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Published as

Lars Oxelheim, (2001), 'Routes to Equity Market Integration - The Interplay between Politicians, Investors and Managers', Journal of Multinational Financial Management, vol 11, no 2, pages 183-211

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