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Regional Integration of Stock Markets in Latin America

Author

Listed:
  • Heaney, Richard

    (Australian National University)

  • Hooper, Vince

    (University of South Wales)

Abstract

This paper examines the trend towards regionalism upon stock market returns in Latin America. Average correlations with other countries in the region and with the world suggest that the Latin American stock markets have become more regionally integrated over the study period. This finding reflects the growing cooperation between Latin American countries since liberalisation in the early 1990s. Prior to liberalisation, Latin American stock market returns showed greater association with the more developed markets, particularly the USA, than with their closest neighbour. This may have been due to the high dependence upon debt from these developed countries. Analysis highlights the importance of stock market data in helping researchers understand and monitor the regional integration process in Latin America.

Suggested Citation

  • Heaney, Richard & Hooper, Vince, 2002. "Regional Integration of Stock Markets in Latin America," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 17, pages 745-760.
    • Handle: RePEc:ris:integr:0218
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    Citations

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    Cited by:

    1. Tavares, José, 2009. "Economic integration and the comovement of stock returns," Economics Letters, Elsevier, vol. 103(2), pages 65-67, May.
    2. Kate Phylaktis & Lichuan Xia, 2009. "Equity Market Comovement and Contagion: A Sectoral Perspective," Financial Management, Financial Management Association International, vol. 38(2), pages 381-409, June.
    3. Lukanima, Benedicto Kulwizira & Sanchez-Barrios, Luis Javier & Gómez-Bravo, Yuli Paola, 2024. "Towards understanding MILA stock markets integration beyond MILA: New evidence between the pre-Global financial crisis and the COVID19 periods," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 478-497.
    4. Mihir Dash, 2017. "A Study of Granger Causality in Latin American Stock Markets," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 6(2), pages 82-88, May.
    5. Demissew Diro Ejara & Kamal Upadhyaya, 2023. "An Empirical Study of the Impact of the Euro on Cross-Country Diversification," Economies, MDPI, vol. 12(1), pages 1-21, December.
    6. Wim Meeusen (ed.), 2011. "The Economic Crisis and European Integration," Books, Edward Elgar Publishing, number 14130.
    7. Barari, Mahua, 2004. "Equity market integration in Latin America: A time-varying integration score analysis," International Review of Financial Analysis, Elsevier, vol. 13(5), pages 649-668.
    8. Alexandra Horobet & Sorin Dumitrescu, 2011. "Time-varying Diversification Benefits: The Impact of Capital Market Integration on European Portfolio Holdings," Chapters, in: Wim Meeusen (ed.), The Economic Crisis and European Integration, chapter 13, Edward Elgar Publishing.
    9. Aman Srivastava & Shikha Bhatia & Prashant Gupta, 2015. "Financial Crisis and Stock Market Integration: An Analysis of Select Economies," Global Business Review, International Management Institute, vol. 16(6), pages 1127-1142, December.
    10. Chee Wooi Hooy, 2008. "Does trade regionalism increase stock market segmentation within a trading bloc?," International Economic Journal, Taylor & Francis Journals, vol. 22(1), pages 113-126.

    More about this item

    Keywords

    Regionalism; Time Changing Correlations; Integration;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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