Determinants of international financial integration

There has been an increase in the degree of international financial integration over the last two decades. Countries are trying to remove the restrictions on cross-border capital movement, deregulate the domestic financial markets and offer competitive investment environment to encourage investment. As a result, international financial integration has been a topical area for a voluminous research. However, there is a limited number of studies focusing on the determinants of international financial integration theoretically and empirically. To enrich the literature on this topic, the current paper will empirically investigate the potential ?drivers? of international financial integration including policy on capital controls and other components of financial structure which are level of economic and educational development, economic growth, institutional and legal environment, trade openness, financial development and tax policy.