Does the Financial Integration in ASEAN+3 Respond to Financial Cooperation Agreement and Influence the Real Sectors?

Md. Saifur Rahman () and Farihana Shahari ()
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Md. Saifur Rahman: Department of Economics, Finance and Marketing, Collage of Business, RMIT University, Melbourne, Australia
Farihana Shahari: Department of Finance, Faculty of Economics and Management Science, International Islamic University Malaysia, Gombak-53100, Selangor, Malaysia

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2019, vol. 22, issue 01, 1-18

Abstract: This paper aims to investigate the degree of financial integration by employing Markov Switching (MS) technique. It further examines the influence of financial integration on the real sectors by employing GMM approach. The finding indicates following outcomes; (1) the financial markets of ASEAN+3 economies are weakly integrated during pre-agreement periods; (2) the degree of financial integration improves during post-agreement period in which financial integration has positive influence on the real economy; (3) higher degree of financial integration indicates a positive influence on the real economies. Finally, this study offers policy implication for stabilizing the real economy.

Keywords: Financial integration; ASEAN+3; Markov Switching approach; real economy; generalized method of moments (GMM) (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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DOI: 10.1142/S0219091519500024

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