Meeting: International Seminar on Information and Communication Technology Statistics, Seoul, Republic of Korea, 19-21 July 2010

Ministry of Statistics and Programme Implementation

Financial integration is the process that has been occurring in the European Union for many years and that intensified after adoption of the common currency in 1999. This paper discusses the theoretical framework of financial integration, particularly the definition, typology, benefits and drawbacks. More opportunities for risk sharing and diversification, better allocation of capital among investment opportunities, and potential for higher economic growth were identified as the crucial benefits of financial integration. By contrast, we consider increased vulnerability to external macroeconomic shocks and financial crises transmitted to higher output and consumption volatility as the most serious drawbacks of financial integration. The paper also summarizes the progress in financial integration that has been achieved in individual segments of the European Union financial sector. It is evident that the most integrated are the euro area money market and the government bonds markets. The remaining financial markets are still rather fragmented.

https://mpra.ub.uni-muenchen.de/34393/1/MPRA_paper_34393.pdf

Theory of financial integration and achievements in the European Union

Trade policy uncertainty and improvement in energy efficiency: Empirical evidence from prefecture-level cities in China

This thesis studies international financial integration in the Gulf region. It develops measures of international financial integration for the Gulf Cooperation Council (GCC) countries, investigates the drivers of financial integration, and examines volatility spillovers from regional (Saudi) and global (US) markets to GCC stock markets. The GCC was established in 1981, when a unified economic agreement between six countries, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates, was signed with the objective of realising coordination, integration, and cooperation in various aspects of economic affairs. Understanding of the drivers of international financial integration will provide important insight into the process of monetary and financial integration and of shaping policy decisions in the GCC region. The overall contribution of this thesis is to provide a careful review and understanding of the financial integration, and offer valuable information for policy makers in the GCC region. In this regard, the thesis analyses the degree of international financial integration of the GCC member countries with the rest of the world by employing several quantity measures for international financial integration based on foreign assets and liabilities. The thesis develops time-varying measures of international financial integration of GCC countries based on the international asset pricing theory by employing the multivariate DCC-GARCH model of Engle (2002). The thesis examines the drivers and impact of global financial crisis on GCC countries’ international financial integration. The thesis employs three different bivariate GARCH(1,1) models in symmetric and asymmetric cases (constant

/pdf/financial-integration-in-the-gulf-region-2ijbyh4j37.pdf

Financial integration in the Gulf Region

The relationship between multinationality and value is still one of the most fundamental questions in IB research Gande, Schenzler, and Senbet (2009) claim to have found empirical evidence for the incomplete capital markets theory (ICMT), which stipulates that investors value corporate multinationality due to its risk‐reducing effect We show here that their findings do not support the hypothesis that investors value geographical diversification at the firm level because of its risk reducing effect Further, a review of extant research shows that empirical results concerning the valuation impact of the risk‐reducing effect of geographical diversification at the firm level have to be regarded with caution due to conceptual and methodological inconsistencies Consequently, this paper proposes several methodological refinements

A Commentary on Risk Reduction by Geographic Diversification

Over the past 15 years, financial markets have become increasingly global. The relationship among the equity markets of the developed and the emerging countries has been examined extensively in the literature. This paper studies the interdependence among the major stock markets of the world. Using the monthly data from January 1993 to September 2003, we examine the stock market indices of India (Sensex), Hong Kong (Hang Seng), the USA (DJIA) and the UK (FTSE-100). Co-integration technique has been employed to study the long-term linkages among the markets. We found that the equity markets of India and Hong Kong are co-integrated with the other markets whereas the markets of the USA and UK are not.

International Financial Markets Integration or Segmentation: A Case Study of Equity Markets

Enhancing energy efficiency of Indian industries: Effectiveness of PAT scheme

International Financial Markets Integration or Segmentation: Case Study on Equity Markets

India adopted a Cap and Trade in energy intensity via a scheme called Perform-Achieve-Trade (PAT) with the objective to improve energy efficiency of the high energy intensive industries through target setting and tradable energy saving certificates. The scheme was announced in 2007 and the first cycle runs from April 2012-March 2015. This is the first market-based instrument adopted in India to achieve environmental protection. Under this scheme, the Bureau of Energy Efficiency identified eight most energy intensive industries, and within each of these industries it identified the most energy intensive plants and assigned them Energy Intensity (EI) targets. Firms exceeding their targets were given ESCerts which could be traded in Indian Energy Exchange and Power Exchange of India. This paper aims to examine effectiveness of the PAT scheme on inducing firms to reduce energy intensity of Cement, Fertilizer, and Pulp and Paper Industries. We use panel data for firms in the three industries with a difference-in-difference model to estimate the average treatment effect of the PAT scheme on firms that were assigned targets. We find that the PAT scheme was effective in improving energy intensity of firms in the cement and fertilizer industry, but not in the pulp & paper industry. Further, the scheme resulted in a decrease of power & fuel expenditure in the two industries, which in turn amounts to reduction of 9.53 million tC and 1.37 million tC for the cement and fertilizer industries respectively. The paper finally examines the market for ESCerts.

Hena Oak

Papers

International Financial Markets Integration or Segmentation: A Case Study of Equity Markets

Enhancing energy efficiency of Indian industries: Effectiveness of PAT scheme

International Financial Markets Integration or Segmentation: Case Study on Equity Markets

Effect of Perform-Achieve-Trade Policy on Energy Efficiency of Indian Industries

Effect of Perform-Achieve-Trade Policy on Energy Efficiency of Indian Industries: Evidence from Fertilizer Industry