Benefiting from diversity in Middle Eastern stock markets

This study examines the potential integration between Middle Eastern stock markets, in particular Egypt, Israel, Jordan, Morocco, Saudi Arabia and Turkey. In a geographical area where there are extreme political and ideological differences, we find gains from financial market integration in the area...

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Bibliographic Details
Published in:Applied financial economics 2008-02, Vol.18 (3), p.229-237
Main Author: Abumustafa, Naser I.
Format: Article
Language:English
Subjects:
Cointegration
Cointegration analysis
Diversification
Economic growth
Gross domestic product
Market theory
Middle East
Securities markets
Stock exchange
Stock exchanges
Studies
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Summary:This study examines the potential integration between Middle Eastern stock markets, in particular Egypt, Israel, Jordan, Morocco, Saudi Arabia and Turkey. In a geographical area where there are extreme political and ideological differences, we find gains from financial market integration in the areas of efficiency and diversification. The study presents empirical evidence of cointegration between stock market capitalization and GDP in these countries, which shows that stock market growth is tied to economic growth. We also present some institutional detail in order to develop practical suggestions to strengthen Middle Eastern stock markets.
ISSN:0960-3107
1466-4305
DOI:10.1080/09603100601018765