Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81300
Authors: 
Vlachos, Jonas
Year of Publication: 
2004
Series/Report no.: 
IUI Working Paper 612
Abstract: 
By combining new data on bilateral asset holdings with data on securities regulation in an empirical gravity model, it is found that bilateral differences in securities regulation lead to decreased portfolio holdings. Hence, regulatory harmonization can foster financial integration. The results are especially strong for equity holdings. It is verified that the results do not just reflect general economic, institutional, and cultural differences. Additional analysis of causality shows the exogenous component of asset holdings to be associated with larger differences in securities regulation. This might suggest that regulatory differences are used to protect domestic capital markets from outside competition.
Subjects: 
Cross-Border Portfolio Investments
Gravity Model
Harmonization
Home Bias
Integration
Securities Regulation
JEL: 
F21
F36
G15
G18
K22
Document Type: 
Working Paper

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