Stock Exchange Competition, New Marketplaces and the Origins of a Global Asset in Europe.

Leading theories of financial change provide increasingly inadequate explanations for changing financial arrangements in western Europe. They either emphasize the internationalization of domestic finance, convergence to global standards and the causal role of increasing levels of mobile capital or ideas. Or they describe change within a national trajectory and attribute its causes primarily to the determining role of domestic politics and historical institutions. They exclude by assumption the possibility of distinct regional outcomes and European-level causes. My empirical study of changing financial arrangements for smaller European companies between 1977 and 2003, however, reveals a characteristically European pattern of change and causes primarily rooted in European Union politics. Neither global forces nor continuity of national institutions was primarily responsible for drawing the stock exchanges of Europe into cross-border competition, prompting them to create new US-style marketplaces and assets or luring international investors as customers. Instead, the interventions of EU supranational political actors and new EU legislation were the primary causes behind this pattern of significant change. [ABSTRACT FROM AUTHOR]