TY  - JOUR
AU  - Ekinci, Mehmet Fatih
AU  - Kalemli-Ozcan, Sebnem
AU  - Sorensen, Bent
TI  - Financial Integration within EU Countries: The Role of Institutions, Confidence and Trust
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13440
PY  - 2007
Y2  - September 2007
DO  - 10.3386/w13440
UR  - http://www.nber.org/papers/w13440
L1  - http://www.nber.org/papers/w13440.pdf
N1  - Author contact info:
Mehmet Ekinci
Department of Economics
University of Rochester
Harkness Hall
Rochester, NY 14627
E-Mail: mfekinci@gmail.com

Ṣebnem Kalemli-Özcan
Department of Economics
University of Maryland
Tydings Hall 4118D
College Park, MD 20742-7211
Tel: 301/405-3266
E-Mail: kalemli@econ.umd.edu

Bent Sorensen
Department of Economics
University of Houston
3623 Cullen Blvd
Houston, TX 77204-5019
Tel: 713-743-3841
Fax: 713-743-3798
E-Mail: besorensen@uh.edu
M1  - published as Mehmet Fatih Ekinci, Şebnem Kalemli-Özcan, Bent E. Sørensen. "Financial Integration within EU Countries: The Role of Institutions, Confidence and Trust," in Richard Clarida and Francesco Giavazzi, organizers, "NBER International Seminar on Macroeconomics 2007" University of Chicago Press (2008)

M3  - presented at "ISOM", June 15-16, 2007
AB  - We investigate the degree of financial integration within and between European countries. We construct two measures of de-facto integration across European regions to capture "diversification" and "development" finance in the language of Obstfeld and Taylor (2004). We find evidence that capital market integration within the EU is less than what is implied by theoretical benchmarks and also less than what is found for U.S. states. We ask - why is this the case? Using country-level data for economic institutions, we find that these are not able to explain differences between countries. Using regional data from the World Values Surveys, we investigate the effect of "social capital" on financial integration among European regions. We find regions, where the level of confidence and trust is high, are more financially integrated with each other.
ER  -