This supplement reviews the growth in emerging capital markets and provides a setting for understanding the nature of the integration process as well as the behaviour of national stock-price movements.

I. International Capital Market Interactions. Dynamic linkages among Latin American and other major world stock markets (Y. Shachmurove). International transmission of innovation among EC stock markets (J. Friedman, Y. Shachmurove). Stock market linkages between the United States and Southern European countries (M.S. Kulkarni). Integration and anomalies in the emerging markets of Asia and Latin America (R. Aggarwal, R. Leal). Pacific-Basin stock market linkages (B. Arshanapalli, J. Doukas). The heteroskedastic behavior of stock prices in an integrated global market: evidence from Taiwan and Korea (Bang Nam Jeon, Kap-Soo Oh and T.C. Chiang). Oil and world stock markets reaction to the Gulf crisis (A.G. Malliaris, G.L. Urrutia). Why stock valuation ratios differ internationally (Jongmoo Jay Choi, M.G. Papaioannou). II. Financial Issues in Emerging Markets. Financial liberalization and bank solvency: a multi-country study (J. Chavez, K.P. Fischer and E. Ortiz). The effect of deposit variable on the portfolio behavior of commercial banks in an emerging financial market (I.A. Moosa, N.E. Al-Loughani). The Korean Stock Market: the road to globalization and liberalization (Young-Kwon Cho, S.R. Cunningham). Capital market integration and emerging markets (A. Alford, J. Lussier). Price effects of stock ownership restrictions for foreigners in emerging markets (C. Sherman Cheung, C.C.Y. Kwan and H.A. Thomas). Non-normality of returns in emerging markets: a comparison of mean-variance versus mean-lower partial moment asset pricing models (B. Eftekhari, S.E. Satchell). Risk aversion and the efficient markets model for stock prices: evidence from the Athens Stock Exchange (D.G. Kirikos). Liquidity, stock returns, and ownership structure: an empirical study of the Bombay Stock Exchange (V.R. Eleswarapu, C. Krishnamurthi). Do we expect more latent variables in a structurally different market: the case of Hong Kong (Wai Lee, Hung-Gay Fung and Wai-Chung Lo). The Philippines Call Market for interest rate futures: mean reversion and volatility structure (Moon Hoe Lee, O.L.C. Ranit). The effects of environmental regulation on stock prices on the Mexican Stock Exchange (D.W. French, M.J. Herrera and J.M. Tanski). The robustness of the day-of-the-week effect: evidence from the Taiwan Stock Exchange (Che-Peng Lin, M.M. Walker). Capital structures in middle-income countries: a study of Indonesia and Malaysia (Q. Hussain).