The Impact of International Financial Integration on Income Convergence

The widespread progress on capital account liberalization and the massive increase in financial flows across the borders, have stimulated a lively debate on the broad economic effects of financial openness.
This paper contributes to the debate by assessing whether financial openness facilitates per-capita income catching-up across countries in Iran and the developing countries? As the current wave of globalization has generated widespread interest among national policymakers on the factors and policies that best promote economic integration, the paper provides empirical evidence on whether financial openness should be included among such policies by focusing on the dimensions that most critically characterize the process of economic integration, namely income convergence?
The key results of the analysis can be summarized as follows:Financial openness, financial integration and internal financial development, significantly facilitates per-capita income catching-up, but the role of internal financial development are more than two other variables.