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.
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