Abstract
This article explores the role of long-run cultural barriers, captured by genetic distance, in driving differences in stock market integration. The main hypothesis is that genetic distance rises barriers to cross-border dissemination of global market-wide information, leading to greater disparities in the integration of local stock markets. Using panel data from 44 countries for the period 2004–2021, the results show that low (high) levels of genetic distance are associated with high (low) stock market integration. Further evidence suggests that this effect can be mitigated in the local markets by improving the risk profile and quality of institutions, financial openness, and the development of communication systems.
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