European Corporate Involvement in the Americass Impact on Capital Market and Currency Union Integration in Europe

Abstract

The purpose of this study is to provide a contribution to the analysis of foreign cross-listing behaviour in general, and on the state of the integration of the European region's capital markets and economies in specific; while also examining the market preferences of European firms in the Americas and around the world in the context of their integration within the Americas. A logistic regression model is developed which takes into consideration exchange, firm, geographic, and industrial regressors in order to determine whether firms prefer listing on which American stock exchange. Unit-root causality tests and ARCH regressions are run on the economic specific characteristics of the European economies to analyse currency union and finance market integration possibilities. It seems as if the European governments utilise the global financial markets quite efficiently, as the amount of entities they have is relatively equal to the number of issuances. The European governments do look to their home exchanges first for their financing needs, then to the regional European markets, and then to the world markets, thus suggesting that the European governments utilise the financial markets efficiently.