Abstract:

The financial liberalization process in the countries has increased efficiency in the financial markets while the impact of developments in the field of communication technology and the progress in information technology and accelerated globalization has resulted in reduced transaction costs. The desire of developed countries to create more profitable investment opportunities in their own capital and the adoption of policies for financial liberalization have led to significant dimensions by bringing a great speed to international capital movements. The development of these factors has led to the increased importance of capital flows in the world and the intense discussion of their impacts on the country’s economies. In recent years, the country’s capital markets are rapidly integrated into global markets. This makes it important to determine the degree of mobility of capital markets.

The aim of this study is to determine the degree of integration of the capital markets of 27 developing countries, including Turkey, into the international capital markets. One of the most effective ways to measure financial integration is to measure the correlation between domestic savings rates and domestic investment rates. At this point, the Feldstein-Horioka approach, which is also the foundation of the study and discusses the relationship between domestic savings rates and domestic investment rates, has been discussed. The forecast results obtained using panel data techniques indicate that the analysed countries have low capital mobility.

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