This eleventh volume in the series on research in international business and finance deals with studies in the financial markets of the Pacific Basin. Topics covered by the book include emerging Asian equity markets and the money markets of the area.

This first part of the eleventh volume in the series on research in international business and finance deals with studies in the financial markets of the Pacific Basin. Topics covered by the book include emerging Asian equity markets and the money markets of the area.

Advances in Pacific Basin Business, Economics, and Finance is an annual publication designed to focus on interdisciplinary research in finance, economics, and management. It particularly emphasizes the economic, financial, and management relationships among Pacific Rim countries.

This eleventh volume in the series on research in international business and finance deals with studies in the financial markets of the Pacific Basin. Topics covered by the book include emerging Asian equity markets and the money markets of the area.

Advances in Pacific Basin Business, Economics and Finance (APBBEF) is an annual series designed to focus on interdisciplinary research in finance, economics, and management among Pacific Rim countries.

This paper investigates the extent to which financial markets in the Pacific Basin Region have become more integrated, by analyzing the comovements of real interest rates. The paper uses cointegration and error correction models and draws inferences on the degree of capital market integration by looking at the speed of adjustment of real interest rates following a shock. The results show that there has been an increase in capital market integration with both U.S. and Japan during the 1980s. Japan has not, however, overtaken U.S. in dominating the financial markets of these countries, except possibly in the case of Malaysia. Capital market integration is found to be greater in Singapore, Hong Kong and Taiwan Province of China. On the other hand, Japan is the least integrated country with the United States.