IDEAS home Printed from https://ideas.repec.org/a/gam/jjrfmx/v16y2023i12p495-d1288478.html
   My bibliography  Save this article

Global Financial Market Integration: A Literature Survey

Author

Listed:
  • Sama Haddad

    (Department of Accounting Finance and Economics, Griffith University, Nathan 4111, Australia)

Abstract

This article undertakes a literature review on the topic of market integration, covering over 380 articles from the 1980s to 2024. The review consists of a qualitative analysis for context and a quantitative analysis for content, identifying key research streams and proposing directions for future research. I have identified six research groups: (1) market segmentation, (2) portfolio diversification, (3) market integration evidence from developed and emerging markets, (4) spillovers and linkages, (5) economic market integration, and (6) financial market integration and volatility. The literature focuses on market integration; it aims to answer the following questions: (1) What is the scope of market integration research? (2) What are the direct influences of market integration looking at top journals and authors and characteristics of most studied and cited topics? (3) What are the past and recent topics studied within the area of market integration? (4) What are the potential future research questions to explore in market integration? The topic of market integration has been controversial in many studies, as seen in policy decision-making, investments, and other related areas; this literature will provide great benefit for such an audience.

Suggested Citation

  • Sama Haddad, 2023. "Global Financial Market Integration: A Literature Survey," JRFM, MDPI, vol. 16(12), pages 1-27, November.
    • Handle: RePEc:gam:jjrfmx:v:16:y:2023:i:12:p:495-:d:1288478
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1911-8074/16/12/495/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1911-8074/16/12/495/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Chang, Chun-Ping & Lee, Chien-Chiang, 2015. "Do oil spot and futures prices move together?," Energy Economics, Elsevier, vol. 50(C), pages 379-390.
    2. Lukanima, Benedicto Kulwizira & Sanchez-Barrios, Luis Javier & Gómez-Bravo, Yuli Paola, 2024. "Towards understanding MILA stock markets integration beyond MILA: New evidence between the pre-Global financial crisis and the COVID19 periods," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 478-497.
    3. Dutta, Anupam & Bouri, Elie & Rothovius, Timo & Uddin, Gazi Salah, 2023. "Climate risk and green investments: New evidence," Energy, Elsevier, vol. 265(C).
    4. Chang, Chia-Lin & McAleer, Michael & Tansuchat, Roengchai, 2011. "Crude oil hedging strategies using dynamic multivariate GARCH," Energy Economics, Elsevier, vol. 33(5), pages 912-923, September.
    5. Twm Evans & David G. McMillan, 2009. "Financial co-movement and correlation: evidence from 33 international stock market indices," International Journal of Banking, Accounting and Finance, Inderscience Enterprises Ltd, vol. 1(3), pages 215-241.
    6. Bekaert, Geert & Harvey, Campbell R., 1997. "Emerging equity market volatility," Journal of Financial Economics, Elsevier, vol. 43(1), pages 29-77, January.
    7. Bekaert, Geert & Mehl, Arnaud, 2019. "On the global financial market integration “swoosh” and the trilemma," Journal of International Money and Finance, Elsevier, vol. 94(C), pages 227-245.
    8. Albuquerque, Rui & Loayza, Norman & Serven, Luis, 2005. "World market integration through the lens of foreign direct investors," Journal of International Economics, Elsevier, vol. 66(2), pages 267-295, July.
    9. Bekaert, Geert & Harvey, Campbell R., 2003. "Emerging markets finance," Journal of Empirical Finance, Elsevier, vol. 10(1-2), pages 3-56, February.
    10. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    11. Umar Bida Ndako, 2013. "Dynamics of Stock Prices and Exchange Rates Relationship: Evidence From Five Sub-Saharan African Financial Markets," Journal of African Business, Taylor & Francis Journals, vol. 14(1), pages 47-57, April.
    12. Zhihua Ding & Lingyun He & Caicai Feng & Wenbo Li, 2016. "The impact of coal price fluctuations on China’s economic output," Applied Economics, Taylor & Francis Journals, vol. 48(24), pages 2225-2237, May.
    13. Murad A. BEIN & Mehmet AGA, 2016. "On the Linkage between the International Crude Oil Price and Stock Markets: Evidence from the Nordic and Other European Oil Importing and Oil Exporting Countries," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 115-134, December.
    14. Robert F. Engle & Olivier Ledoit & Michael Wolf, 2019. "Large Dynamic Covariance Matrices," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 37(2), pages 363-375, April.
    15. Kim, Hyun-Seok & Min, Hong-Ghi & McDonald, Judith A., 2016. "Returns, correlations, and volatilities in equity markets: Evidence from six OECD countries during the US financial crisis," Economic Modelling, Elsevier, vol. 59(C), pages 9-22.
    16. Li, Kai & Sarkar, Asani & Wang, Zhenyu, 2003. "Diversification benefits of emerging markets subject to portfolio constraints," Journal of Empirical Finance, Elsevier, vol. 10(1-2), pages 57-80, February.
    17. Heaney, Richard & Sriananthakumar, Sivagowry, 2012. "Time-varying correlation between stock market returns and real estate returns," Journal of Empirical Finance, Elsevier, vol. 19(4), pages 583-594.
    18. Shehadeh, Ali A. & Zheng, Min, 2023. "Calendar anomalies in stock market returns: Evidence from Middle East countries," International Review of Economics & Finance, Elsevier, vol. 88(C), pages 962-980.
    19. Julien Chevallier, 2011. "Anticipating correlations between EUAs and CERs: a Dynamic Conditional Correlation GARCH model," Economics Bulletin, AccessEcon, vol. 31(1), pages 255-272.
    20. Christian M. Hafner & Hans Manner, 2012. "Dynamic stochastic copula models: estimation, inference and applications," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 27(2), pages 269-295, March.
    21. repec:dau:papers:123456789/5441 is not listed on IDEAS
    22. Click, Reid W. & Plummer, Michael G., 2005. "Stock market integration in ASEAN after the Asian financial crisis," Journal of Asian Economics, Elsevier, vol. 16(1), pages 5-28, February.
    23. Engle, Robert F, 1990. "Stock Volatility and the Crash of '87: Discussion," The Review of Financial Studies, Society for Financial Studies, vol. 3(1), pages 103-106.
    24. Nazlioglu, Saban & Kucukkaplan, Ilhan & Kilic, Emre & Altuntas, Mehmet, 2022. "Financial market integration of emerging markets: Heavy tails, structural shifts, nonlinearity, and asymmetric persistence," Research in International Business and Finance, Elsevier, vol. 62(C).
    25. Lago-Balsalobre, Rubén & Rojo-Suárez, Javier & Alonso-Conde, Ana B., 2023. "Cross-sectional implications of dynamic asset pricing with stochastic volatility and ambiguity aversion," The North American Journal of Economics and Finance, Elsevier, vol. 66(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lin Xiao & Arash Sioofy Khoojine, 2024. "Dynamic Anomaly Detection in the Chinese Energy Market During Financial Turbulence Using Ratio Mutual Information and Crude Oil Price Movements," Energies, MDPI, vol. 17(23), pages 1-22, November.
    2. Abdelmohsen A. Nassani & Muhammad Imran & Shiraz Khan & Khalid Zaman & Haroon ur Rashid Khan & Mohamed Haffar, 2025. "Financial integration and economic growth: impact of renewable energy investments, technology transfer, and climate change on Europe and central Asian economies," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 11(1), pages 1-24, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jebabli, Ikram & Roubaud, David, 2018. "Time-varying efficiency in food and energy markets: Evidence and implications," Economic Modelling, Elsevier, vol. 70(C), pages 97-114.
    2. Qin, Weiping & Cho, Sungjun & Hyde, Stuart, 2022. "Measuring market integration during crisis periods," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 78(C).
    3. Boryana Bogdanova, 2014. "Measuring the degree of integration within a group of stock markets," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 26-46.
    4. Cristiana Tudor, 2011. "Changes in Stock Markets Interdependencies as a Result of the Global Financial Crisis: Empirical Investigation on the CEE Region," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 58(4), pages 525-543, December.
    5. Kearney, Colm, 2012. "Emerging markets research: Trends, issues and future directions," Emerging Markets Review, Elsevier, vol. 13(2), pages 159-183.
    6. Karen K. Lewis, 2011. "Global Asset Pricing," Annual Review of Financial Economics, Annual Reviews, vol. 3(1), pages 435-466, December.
    7. Dimpfl, Thomas, 2014. "A note on cointegration of international stock market indices," International Review of Financial Analysis, Elsevier, vol. 33(C), pages 10-16.
    8. Nigatu, Getachew & Adjemian, Michael K., 2016. "The U.S. Role in the Price Determination of Major Agricultural Commodities," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236045, Agricultural and Applied Economics Association.
    9. Dinesh Gajurel & Akhila Chawla, 2022. "International Information Spillovers and Asymmetric Volatility in South Asian Stock Markets," JRFM, MDPI, vol. 15(10), pages 1-18, October.
    10. Andrew Phiri, 2020. "Structural changes in exchange rate-stock returns dynamics in South Africa: examining the role of crisis and new trading platform," Economic Change and Restructuring, Springer, vol. 53(1), pages 171-193, February.
    11. Carlos Trucíos & João H. G. Mazzeu & Marc Hallin & Luiz K. Hotta & Pedro L. Valls Pereira & Mauricio Zevallos, 2022. "Forecasting Conditional Covariance Matrices in High-Dimensional Time Series: A General Dynamic Factor Approach," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 41(1), pages 40-52, December.
    12. Herzer, Dierk & Nunnenkamp, Peter, 2015. "Income inequality and health: Evidence from developed and developing countries," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 9, pages 1-56.
    13. Chao Xu & Jinchuan Ke & Xiaojun Zhao & Xiaofang Zhao, 2020. "Multiscale Quantile Correlation Coefficient: Measuring Tail Dependence of Financial Time Series," Sustainability, MDPI, vol. 12(12), pages 1-24, June.
    14. Wahyoe Soedarmono, 2018. "Stock market integration in the Asia-Pacific region: Evidence from cointegration of liquidity risk," Economics Bulletin, AccessEcon, vol. 38(1), pages 60-70.
    15. Schotman, Peter C. & Zalewska, Anna, 2006. "Non-synchronous trading and testing for market integration in Central European emerging markets," Journal of Empirical Finance, Elsevier, vol. 13(4-5), pages 462-494, October.
    16. Firoozye, Nikan & Tan, Vincent & Zohren, Stefan, 2023. "Canonical portfolios: Optimal asset and signal combination," Journal of Banking & Finance, Elsevier, vol. 154(C).
    17. Jonathan A. Batten & Peter G. Szilagyi & Wagner, 2015. "Should emerging market investors buy commodities?," Applied Economics, Taylor & Francis Journals, vol. 47(39), pages 4228-4246, August.
    18. Mohamed El Hedi Arouri & Mondher Bellalah & Duc Khuong Nguyen, 2010. "The comovements in international stock markets: new evidence from Latin American emerging countries," Applied Economics Letters, Taylor & Francis Journals, vol. 17(13), pages 1323-1328.
    19. Lee, Dongwon, 2023. "Financial integration and international risk spillovers," Economics Letters, Elsevier, vol. 225(C).
    20. Kang, Sang Hoon & Uddin, Gazi Salah & Troster, Victor & Yoon, Seong-Min, 2019. "Directional spillover effects between ASEAN and world stock markets," Journal of Multinational Financial Management, Elsevier, vol. 52.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jjrfmx:v:16:y:2023:i:12:p:495-:d:1288478. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.