INTEGRATION OF AZERBAIJAN FINANCIAL MARKET INTO INTERNATIONAL FINANCIAL MARKETS

Globalization has increased the capital mobility in the world. Increasing opportunities for investors to maximize portfolio returns is one of the greatest benefits of globalization. Financial liberalization has also provided investors with opportunities to diversify their risks. Parallel to this, integration in terms of an effective portfolio management has taken its place among the most discussed topics in the finance literature. Integration efforts in the world financial markets change financial instruments and institutions at increasing speed. Within the framework of this change, foreign investors are investing in many countries' financial instruments in order to diversify their portfolio, resulting in similar trends in price movements. These increase trends in capital mobility provide several advantages, but also some disadvantages. The Azerbaijani financial market, which is in the development phase, has become a share of this investment after 2000s. These rapid developments in international financial markets also affected the Azerbaijan financial market and entered into a process of integration with world markets. Despite its disadvantages to banking and other financial institutions the economy of Azerbaijan, which is in the process of development, provides various benefits from this integration process and significant improvements in the growth rate. This study is a research on how integrated countries similar to Azerbaijan and Azerbaijan's countries with high foreign trade rates are integrated into world markets. As a result of the research, it was observed that the integration of the financial markets of the countries that similar characteristics in terms of development with Azerbaijan was in an increasing trend.