A new set of measures on international financial integration

This paper will attempt to provide a comprehensive review and introduce the concept of international financial integration. In addition, it provides a review on the available indicators used as proxies for international financial integration in empirical studies. It also proposes a more detailed set of new measures on international financial integration. A new database with these measures is constructed for empirical research based on a number of commercial databases. This new database of indicators allows for comparison of the degree of international financial integration across countries and over time. It improves on previous efforts of other scattered sources using those indicators by extensively providing a wide array of indicators, examining the advantages and disadvantages of those indicators. This paper describes the data sources, the construction and the insight for the different indicators and present descriptive statistics. This research also empirically extends to examine and compare the trend of international financial integration between countries over the last two decades.