TY  - JOUR
AU  - Kalemli-Ozcan,Sebnem
AU  - Sørensen,Bent
AU  - Volosovych,Vadym
TI  - Deep Financial Integration and Volatility
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15900
PY  - 2010
Y2  - April 2010
UR  - http://www.nber.org/papers/w15900
L1  - http://www.nber.org/papers/w15900.pdf
N1  - Author contact info:
Sebnem Kalemli-Ozcan
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
204 McElhinney Hall
Houston, TX 77204
Tel: 713-743-3841
Fax: 713-743-3798
E-Mail: besorensen@uh.edu

Vadym Volosovych
Finance Group, Department of Business Economics
Erasmus University Rotterdam
Room H14-30
P.O. Box 1738
3000 DR Rotterdam, The Netherlands
Tel: +31 10 408-1326
Fax: +31 10 408-9165
E-Mail: volosovych@ese.eur.nl
AB  - We investigate the relationship between financial integration and output volatility at micro and macro levels. Using a very large firm-level dataset from EU countries over time, we construct a measure of "deep" financial integration at the regional level based on foreign ownership at the firm level. We find a positive effect of foreign ownership on volatility of firms' outcomes. This effect survives aggregation and carries over to regional output. Exploiting variation in the transposition dates of EU-wide legislation, we find that high trust regions in countries who harmonized capital markets sooner have higher levels of financial integration and volatility.
ER  -