Financial Integration and Structure in Europe: A Comparative Case Study of Bosnia and Herzegovina and Slovenia

The study measures and compares the levels of financial integration in Bosnia and Herzegovina and Slovenia between 2000 and 2020. This study aims to determine the impact of industrial index, gross domestic product per capita, trade openness, and corporate tax rate on the level of international financial integration. The statistical methods employed are unit root tests, OLS regression, the Breusch-Pagan test, and the heteroskedasticity test. For the 20-year time span and annual data for each parameter, the results have shown a significant positive correlation between gross domestic product per capita and financial integration for both countries. The results for Slovenia indicate that financial integration is negatively affected by trade openness and corporate tax rates, whereas gross domestic product per capita and industrial production index affect positively. In the case of Bosnia and Herzegovina, corporate tax rate and industrial production index affect financial integration negatively, while trade openness affect positively but insignificant with financial integration.