Global Stock Market Integration of Emerging Markets in a Globalizing World: Evolution and Impact of Globalization Sub-Categories

Details

Supervisors

Iania, Leonardo

Faculty

Louvain School of Management

Degree label

Master [120] : ingénieur de gestion, à finalité spécialisée

Abstract

While emerging countries seem increasingly integrated into global markets, only a few measures are consistent with this intuition. The thesis constructs a measure of integration based on the explanatory power of a multi-factor model. It empirically shows an upwards trend in global stock market financial integration in the Asian, EMEA, and American emerging countries over the last three decades. Only three countries are exceptions. Moreover, the research suggests that emerging countries might be more integrated into the global market via their conditional standard deviation. The analysis of the 2008 crisis has demonstrated that the contagion of a financial crisis decreases the markets' integration, and this observation is especially accurate for the more integrated markets. Finally, financial and informational globalization positively and significantly influences the integration of emerging markets. The inclusion of control variables allows the study to highlight that both local regulatory and global non-regulatory factors impact the financial integration of emerging markets.