How much globalization is there in the world stock markets and where is it?

Globalization, as the process of integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration and the spread of technology, has been analyzed by academic literature in different manners. Anyway a comprehensive analysis in a worldwide perspective that compares all the main stock markets' performances in a long term period misses. In this paper, the authors try to fill this gap by a correlation analysis applied to stock exchange market indexes. This methodology is implemented in order to highlight the dynamic trend of financial market globalization. The paper investigates the degree of association of weekly returns for 53 international stock exchanges from 1995 to 2010 in a year-by-year approach, trying to evaluate how the average correlation through national stock indexes changed by the time. Moreover, an analysis of single geographical areas (North America and Canada, Latin America, Asia and Oceania, Northern Europe, Eastern Europe and Western Europe) has been done in order to test the hypothesis that globalization follows a homogenous (or heterogeneous) path. Results suggest an upward globalization trend that is developing at an increasing growth rate. Furthermore, an analysis of single geographical areas supports the hypothesis that globalization is a heterogeneous phenomena where different cluster of countries are engaged in different manners