  The minimum spanning tree is used to study the process of market integration
for a large group of national stock market indices. We show how the asset tree
evolves over time and describe the dynamics of its normalized length, mean
occupation layer, and single- and multiple-step linkage survival rates. Over
the period studied, 1997-2006, the tree shows a tendency to become more
compact. This implies that global equity markets are increasingly interrelated.
The consequence for global investors is a potential reduction of the benefits
of international portfolio diversification.
