Abstract
AbstractIn this paper, we examine the dynamic nature of equity market integration for the South Asian countries. The daily data for local equity indices are used from 6 January 2004 to 31 March 2015. Copula GARCH models and Diebold and Yilmaz methodology have been employed to study the inter-temporal process of equity market integration. Empirical results show that the sample countries of the region exhibit very little or no levels of integration between them. Equity portfolio flows within the South Asian region reconfirms this trend for low integration in the region. Further, trend analysis of the fundamental determinants of financial integration for the SAARC countries was performed and the same was compared with its neighbouring regional economic bloc in Asia i.e. ASEAN + 6. It indicated that SAARC countries have to show sincere political commitment and require collaboration in efforts of policy realignment to work on their governance parameters, improve on their trade linkages and trade tariffs and de...
Highlights
The forces of economic globalization i.e liberalization, privatisation and deregulation are the dominant factors behind the growing acceptability and importance of economic regionalism around the world
Until the late 1970s, high protectionist trade policies by maintaining tariff and non-tariff barriers, heavy state intervention in economic activity, strict exchange rate controls, discouragement of foreign capital were some of the few measures being practiced in the South Asian1 countries which led to a contraction in their economic growth
Regional cooperation was formally initiated in South Asia with the formation of a trade bloc named as South Asian Association of Regional Cooperation (SAARC) in 1985
Summary
The forces of economic globalization i.e liberalization, privatisation and deregulation are the dominant factors behind the growing acceptability and importance of economic regionalism around the world. Until the late 1970s, high protectionist trade policies by maintaining tariff and non-tariff barriers, heavy state intervention in economic activity, strict exchange rate controls, discouragement of foreign capital were some of the few measures being practiced in the South Asian countries which led to a contraction in their economic growth This heterogeneous and unique region encompassing small and big economies in different stage of their economic development was embroiled in political conflicts which slowed its growth leading to high levels of poverty (home to 44% of world poor, Source: World Bank) amongst its large population and low levels of human development. Given the increasing emphasis on closer regional co-operation across the world, it is an opportune time for the political leadership of the SAARC countries to steer their way through their political standoffs and embrace an open regionalism and institutional change which can help make South Asia an active partner in Asian economic integration and global economy.
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
