Foreign direct investment and international stock market integration

  title={Foreign direct investment and international stock market integration},
  author={Jing Shi and Chris Bilson and John G. Powell and J. David Wigg},
  journal={Australian Journal of Management},
  pages={265 - 290}
This paper examines whether foreign direct investment between countries fosters stock market integration. Empirical tests demonstrate that both the flow and the level of bilateral foreign direct investment between countries explain country-pair stock market integration. More specifically, higher bilateral foreign direct investment levels and flows increase Australia’s stock market integration with its major trade partners. 

Figures and Tables from this paper

Financial and Economic Integration's Impact on Asian Equity Markets’ Sensitivity to External Shocks
This paper investigates the spillover effects from U.S. and regional stock markets on local stock markets in the Pacific Basin region and China. We also analyze if the spillover depends on countries’
Trade and Investment Linkages and Stock Market Long‐Run Relationship
type="main"> This paper aims to examine whether the intensity of trade and investment linkages among the countries matter for their stock market long-run relationship. To achieve this, we classify
Investment, financial sector development and the degree of emerging markets integration
Purpose The purpose of this paper is to explore the co-movements among emerging markets. The authors, additionally, investigate the driven force of the within emerging markets integration. The
Does integration lead to lower costs of equity?
Recent evidence has suggested that the benefits of equity market integration may not be shared equally by all firms. Making use of a firm-level measure of integration we investigate whether one of
Factors affecting stock market index volatility: Empirical study
How to cite this paper: Al-Rimawi, M. A., & Kaddumi, T. A. (2021). Factors affecting stock market index volatility: Empirical study. Journal of Governance & Regulation,
Economic literature has long shown that capital flows and their volatilities are important for the development, growth and economic stability of economies. Developing countries have been increasingly
This study aimed to assess the factors affecting the investment in AEM. This research used a random sample of investors to measure these factors. A questionnaire was used as a tool for data
The dynamic evolution of stock market integration between China, Japan and South Korea. What are the key determinants of regional stock market integration between these countries?
This paper investigates the dynamic evolution of the conditional correlation between the stock markets of China, Japan and South Korea by using the DCC-MGARCH model and investigates the key
The Role of Chinese Economic Variables on the Australian and New Zealand Equity Returns
This study investigates the explanatory power of Chinese economic variables on the Australian and New Zealand equity returns. Results suggest that Chinese economic variables have significant
Board Reforms and the Cost of Equity: International Evidence
We examine the impact of corporate board reforms on the COE using a sample of data in 41 countries for the period from 1992 to 2012. We find a significant increase in the COE after board reforms


Stock Market Liberalization, Economic Reform, and Emerging Market Equity Prices
A stock market liberalization is a decision by a country's government to allow foreigners to purchase shares in that country's stock market. On average, a country's aggregate equity price index
A Synthesis of Foreign Direct Investment Theories and Theories of the Multinational Firm
This paper first presents a taxonomy of the foreign direct investment theories following the market imperfections paradigm. It then focuses on recent developments pertaining to the theory of the
Foreign Speculators and Emerging Equity Markets
A number of countries have delayed the opening of their capital markets to international" investment because of reservations about the impact of foreign speculators on both expected" returns and
Asian Economic Integration and Stock Market Comovement
Using daily returns from 1988 to 1998, we investigate to what degree twelve equity markets in Asia are integrated with Japan's equity market and examine the factors that affect the level of economic
Financial liberalisation: from segmented to integrated economies
Measuring Financial and Economic Integration with Equity Prices in Emerging Markets
Abstract This paper examines real and financial links simultaneously at the regional and global level for a group of Pacific-Basin countries by analysing the covariance of excess returns on national