Financial Integration within EU Countries: The Role of Institutions, Confidence and Trust / Mehmet Fatih Ekinci, Sebnem Kalemli-Ozcan, Bent Sorensen.

Format:

Book

Author/Creator:

Ekinci, Mehmet Fatih.

Contributor:

National Bureau of Economic Research.

Kalemli-Ozcan, Sebnem.

Sorensen, Bent.

Series:

Working Paper Series (National Bureau of Economic Research) no. w13440.

NBER working paper series no. w13440

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Financial Integration within EU Countries

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2007.

Summary:

We investigate the degree of financial integration within and between European countries. We construct two measures of de-facto integration across European regions to capture "diversification" and "development" finance in the language of Obstfeld and Taylor (2004). We find evidence that capital market integration within the EU is less than what is implied by theoretical benchmarks and also less than what is found for U.S. states. We ask - why is this the case? Using country-level data for economic institutions, we find that these are not able to explain differences between countries. Using regional data from the World Values Surveys, we investigate the effect of "social capital" on financial integration among European regions. We find regions, where the level of confidence and trust is high, are more financially integrated with each other.

Notes:

Print version record

September 2007.