IMF Working Paper No. 07/138: International Financial Integration Through
Equity Markets: Which Firms from Which Countries Go Global?

Claessens, Stijn ; Schmukler, Sergio L.

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. 
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