The determinants of international financial integration

It is generally accepted that there has been an increase in the degree of international financial integration over the last two decades. As a result, international financial integration has become a topical area of research for many financial economists. To enrich the literature in this area, our paper provides an empirical investigation into identifying the potential “drivers” of international financial integration including policy on capital controls, the level of economic and educational development, economic growth, institutional and legal environment, trade openness, financial development and tax policy. Overall, the results provide strong evidence in support of our choice of drivers of international financial integration.