Financial development, international trade integration, and stock market integration: Evidence from Asia

•The paper examines the impact of financial development on stock market integration.•The paper examines the impact of international trade integration on stock market integration.•We analyze a sample of 15 countries in Asia over the period 1985–2013.•Financial development has a positive effect on stock market integration.•International trade integration is not associated with stock market integration.

This paper provides an analysis of the influence of financial development and international trade integration on stock market integration. Using a panel sample of 15 developed and developing countries in Asia over the period 1985–2013, we show that a country’s financial development has a positive effect on its stock market integration with the world’s stock market, and that a country’s international trade integration is not associated with its stock market integration with the world’s stock market. In addition, the degree of bilateral stock market integration cannot be explained by variation in bilateral international trade integration.