Work

Does Regulatory Cooperation Help Integrate Equity Markets?

Year: 2020

Type: article

Abstract: This study tests whether cooperation between securities regulators influences global market integration. I measure cooperation using arrangements between securities regulators that enable enhanced cross-border enforcement, better regulatory decisions, and reduced compliance obligations for cross-border activities. These arrangements-formed at different times for different country pairs-are associated with an 11% increase in cross-border investment. I find similar increases using other proxies for market integration. Cross-border investment and market integration thus depend, in part, on regulators working together to extend legal and institutional capacities across borders. This reframes our understanding of the role of institutions in global capital markets.

Source: Journal of Financial Economics

DOI: 10.1016/j.jfineco.2021.05.040

Author: Roger Silvers

Institution: University of Utah

Language: English

Topic: Finance, Markets, and Regulation

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Partnerships for the goals, Peace, justice, and strong institutions

Open Access status: hybrid

Estimated APC paid: $3,060