ABSTRACT
Interest in foreign stock markets has significantly increased during the last two decades, particularly during the 1980s when international portfolio investments seem to have increased substantially.1 Evidence of this interest is reflected in the increasing literature on the subject which is briefly reviewed in this chapter. While advances have been made in both the theory and the empirical analysis of international portfolio investments, significant and fundamental research is still needed on several fronts to advance our understanding of the establishment, functioning, growth and interaction of stock markets with the economies in which they operate. This understanding is critical in order to confidently provide policy recommendations leading to the further development of world stock markets.
