| Summary: | The authors study international
financial integration analyzing firms from various countries
raising capital, trading equity, and cross-listing in major
world stock markets. Using a large sample of 39,517 firms
from 111 countries covering the period 1989-2000, they 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.
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