Abstract

The main focus of this thesis is on developing countries and their integration into international capital markets. The first chapter, after reviewing the literature of financial integration, looks at the effect of accessing international bond markets on fiscal behavior. It aims to shed light on fiscal authorities' reaction to financial opening, and looks at some institutional features of this financial globalization. The second chapter looks as well at financial globalization, but from a different perspective. Its focus is more concerned with investor behavior and how those investors channel flows to emerging markets. One main finding of the empirical investigation is the inter-dependence of those financial flows at a more global level. The third chapter looks at a relatively new financial instrument that is increasingly used in international markets to measure sovereign risk: credit default swaps. It sheds some first insights into what is a relatively new, but fast-growing market

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