Journal Article

Equity Returns and Integration: Is Europe Changing?

Kpate Adjaouté and Jean-Pierre Danthine

in Oxford Review of Economic Policy

Published on behalf of The Oxford Review of Economic Policy Ltd

Volume 20, issue 4, pages 555-570
Published in print January 2004 | ISSN: 0266-903X
Published online January 2004 | e-ISSN: 1460-2121 | DOI: http://dx.doi.org/10.1093/oxrep/grh032
Equity Returns and Integration: Is Europe Changing?

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  • Economic Development and Growth
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This paper analyses the consequences of the process of financial and economic integration on European equity markets. It documents significant changes in ‘fundamentals’, notably an increased synchronization of macroeconomic activities, and a non-negligible evolution in pricing, with a decrease in the cost of capital and converging equity premiums. As to equity returns themselves, in the face of what could turn out to be long-run upward trends in the correlations among both country and sector returns and a narrowing of the superiority of country factors, the benefits to be gained from finding diversification opportunities at a more disaggregated level appear to be higher than ever.

Journal Article.  0 words. 

Subjects: Economic Development and Growth ; Public Economics ; Political Economy ; Public Policy

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