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Journal of Economic Integration 2002 April;17(4) :745-760.
DOI: https://doi.org/10.11130/jei.2002.17.4.745
Regional Integration of Stock Markets in Latin America
Richard Heaney
Vince Hooper and 
Martin Jaugietis 
Australian National University
University of South Wales
Towers Perrin
Copyright ©2002 Journal of Economic Integration
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. JEL Classifications (F15, F36, G12, G15)
Keywords: Regionalism | Time Changing Correlations | Integration
 
REFERENCE
1. Harvey, C. R. (1995), "The Risk Exposure of Emerging Equity Markets", The World Bank Economic Review, 9(1), pp. 19-50.
2. International Finance Corporation (1997), "The IFC Indexes: Methodology, Definitions, and Practices", Emerging Markets Data Base. Washington D.C.
3. Kim, D. C. (1992), "Open Regionalism in the Pacific: A World of Trading Blocs?" American Economic Review, 82(2), pp. 79-83.
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