International Financial Integration Through Equity Markets: Which Firms from Which Countries Go Global?

48 Pages Posted: 23 Aug 2007

See all articles by Stijn Claessens

Stijn Claessens

Bank for International Settlements (BIS)

Sergio L. Schmukler

World Bank - Development Research Group (DECRG)

Multiple version iconThere are 3 versions of this paper

Date Written: June 2007

Abstract

This paper studies international financial integration analyzing firms from various countries raising capital, trading equity, and/or cross-listing in major world stock markets. Using a large sample of 39,517 firms from 111 countries covering the period 1989-2000, we find that, although international financial integration increases substantially over this period, only relatively few countries and firms actively participate in international markets. Firms more likely to internationalize are from larger and more open economies, with higher income, better macroeconomic policies, and worse institutional environments. These firms tend to be larger, grow faster, and have higher returns and more foreign sales. While changes occur with internationalization, these firm attributes are present before internationalization takes place. The results suggest that international financial integration will likely remain constrained by country and firm characteristics.

Keywords: Working Paper, Financial integration, International capital markets, Globalization, Capital accumulation, Stock markets

Suggested Citation

Claessens, Stijn and Schmukler, Sergio, International Financial Integration Through Equity Markets: Which Firms from Which Countries Go Global? (June 2007). IMF Working Papers, Vol. , pp. 1-46, 2007. Available at SSRN: https://ssrn.com/abstract=1007887

Stijn Claessens (Contact Author)

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

Sergio Schmukler

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN MC 3-301
Washington, DC 20433
United States
202-458-4167 (Phone)
202-522-3518 (Fax)

HOME PAGE: http://www.worldbank.org/en/about/people/s/sergio-schmukler

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