Do European capital flows comove?

Silvio Contessi, Pierangelo De Pace

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2 Citations (Scopus)

Abstract

We study the cross-section correlations of net, total, and disaggregated capital flows for the major source and recipient European Union countries. We seek evidence of changes in these correlations since the introduction of the euro to understand whether the European Union can be considered a unique entity with regard to its international capital flows. We make use of Ng s (2006) uniform spacing methodology to rank cross-section correlations and to shed light on potential common factors driving international capital flows. We find that a common factor structure is suitable for equity flows disaggregated by sign but not for net and total flows. We only find mixed evidence that correlations between types of flows have changed since the introduction of the euro.
Original languageEnglish
Pages (from-to)145 - 161
Number of pages17
JournalNorth American Journal of Economics and Finance
Volume20
DOIs
Publication statusPublished - 2009
Externally publishedYes

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