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Measuring the relative development and integration of EU countries’ capital markets using composite indicators and cluster analysis

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  • Gianluca Gucciardi

    (Joint Research Centre (JRC))

Abstract

The paper proposes a set of metrics and a methodology to measure the progress that European Union Member States are making towards the development and integration of capital markets. It identifies a set of indicators and analyzes the performance of these countries over the 2007–2018 period using a composite indicator approach (in both a static and dynamic environment), based on the six priorities related to achieving a well-functioning and integrated European capital market included in the European Commission Capital Markets Union Action Plan. The author uses robust clustering to identify groups of countries and tracks their development over time. He finds that the process of capital market development and integration process has started but is not completed and that it is mainly associated with countries’ adherence to European increasing trends driven by the benchmarks rather than the policy actions of countries aimed at catching up with the best performers.

Suggested Citation

  • Gianluca Gucciardi, 2022. "Measuring the relative development and integration of EU countries’ capital markets using composite indicators and cluster analysis," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 158(4), pages 1043-1083, November.
    • Handle: RePEc:spr:weltar:v:158:y:2022:i:4:d:10.1007_s10290-022-00453-6
    DOI: 10.1007/s10290-022-00453-6
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    Cited by:

    1. Gossé, Jean-Baptiste & Jehle, Camille, 2024. "Benefits of diversification in EU capital markets: Evidence from stock portfolios," Economic Modelling, Elsevier, vol. 135(C).

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    More about this item

    Keywords

    Capital Markets Union; European Union; Composite indicators; Data Envelopment Analysis; Malmquist Productivity Index;
    All these keywords.

    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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