Testing for stock market integration in a developing economy: Colombia Academic Article

abstract

  • This article examines the linkage between two parallel stock exchanges trading the same shares in Colombia, namely the Bogot Stock Exchange and the Medelln Stock Exchange. We provide empirical evidence to support the hypothesis that these two markets can be best described as fully integrated over a period of almost four decades, which is consistent with the view that arbitrage opportunities are only possible in the short but not in the long-run. In addition, we find evidence that the location of a company's headquarters appears to matter in stock price formation.

publication date

  • 2007/7/1

keywords

  • Arbitrage
  • Colombia
  • Developing economies
  • Empirical evidence
  • Headquarters
  • Integrated
  • Linkage
  • Price formation
  • Stock exchange
  • Stock market integration
  • Stock prices
  • Testing

International Standard Serial Number (ISSN)

  • 1744-6546

number of pages

  • 6

start page

  • 231

end page

  • 236