Financial Integration Of Turkey With Countries Which Turkey Export Volume Is Most Intense

Abstract

With financial liberalization, integration between the global markets and the markets of developing countries in particular has improved. This is considered to be disadvantageous to the international investors within the scope of portfolio diversification. Because diversification potentials would be possible only when there is an avoidant or low correlation relation between the instruments, which form the portfolio in accordance with portfolio theory. Growth of integration between the markets results in growth of relation and similarity between the markets. In this study, the relation of correlation and co-integration between the stock-exchange markets of Turkey and 5 countries with which Turkey has the highest rate of exportation is analyzed. The country stock indexes of Germany, England, France, Italy and USA were reviewed in this respect. Following the analysis, it was observed that it is German market that has the highest correlation relation with Turkey. When correlation coefficients were reviewed, it was seen that the lowest correlation relation took place with the USA. According to the results of co-integration test, an inclination to take longtermed joint action was observed between Turkey and the USA, Germany, England, Italy and France.