Policymakers In East Research Articles

Does the East and Southeast Asian Equity Market have Integration? A Study of Cointegration Analysis

Financial integration can improve the efficiency of capital allocation as well as help diversify risks. This study aims to find and analyze four cases. First, to find and analyze the long-term cointegration between East and Southeast Asian. Second, to find and analyze the short-term causal relationship between East and Southeast Asian equity market. Third, to find the most influential equity market from East Asian toward their Southeast Asian and the most influential equity market from Southeast Asian toward their East Asian. Last, to find the forecast structural analysis for five days horizon period of each country’s price, both East and Southeast Asia. This study uses Johansen’s cointegration method to test long-run relationships between East and Southeast Asian equity markets, Granger-causality, forecast variance decomposition method and forecast with VECM. This study uses daily indices prices collected from Refinitive covered from January 2002 to December 2019. Johansen’s test emphasize that there is a cointegration relationship between East Asian and Southeast Asian stock markets, but the integration process is incomplete. The cointegration vector also emphasize that ASEAN+3 members react differently to external shocks. This study found that the Japan Granger-cause will lead to all stock markets in Southeast Asia, while Singapore and Philippine Granger-cause will lead to all stock markets in East Asia. These results show that Japan is the market with the most connections in Southeast Asia, while Singapore and Philippine are the markets with the most connections in East Asia. Another point of this paper is to emphasize that Japan is the most influential stock market in East Asia, while Singapore is the most influential stock market in Southeast Asia. This study shows that policymakers in East and Southeast Asian countries should synchronize capital market standards, regulations and reduce barriers to capital flow to stimulate the integration of regional stock markets.

Integration between East and Southeast Asian equity markets

Purpose – This paper aims to seek to find answers to three questions. First, is there any possibility of long-term cointegration between East and Southeast Asian equity markets? If so, how many cointegrating equations are there? Second, what are the short-term causal relationships between equity markets in East and Southeast Asia? Third, what is the East Asia’s most influential equity market toward their Southeast counterparts, and vice versa? Design/methodology/approach – This study uses Johansen's (1988) cointegration method to test long-run relationships among East and Southeast Asian equity markets. With regards to short-run causal relationships, this study uses Granger-causality test as well as the forecast variance decomposition method. Findings – Johansen test proves that there is cointegration between East and Southeast Asian equity markets, but the integration process is not complete. Cointegrating vector also provides evidence that member countries of ASEAN+3 respond differently to external shocks. With regards to short-run causal direction, this study finds that Japan Granger-causes all equity markets in Southeast Asia, while Singapore and Vietnam Granger-cause all equity markets in East Asia. These results imply that Japan is the market with most linkages in Southeast Asia, while Singapore and Vietnam are the markets with most linkages to East Asia. Furthermore, forecast variance decomposition reveals that Japan is the East Asia’s most influential equity markets, while Singapore is the most influential equity market in Southeast Asia. This study suggests that policymakers in East and Southeast Asian countries to synchronize the capital market standards and regulations as well as to reduce the barriers for capital mobility to spur the regional equity market integration. Research limitations/implications – Increasing integration of East and Southeast Asian capital markets forces policymakers in ASEAN+3 countries to synchronize monetary policies, as it has been found that regionally integrated capital markets reduce the degree of independent monetary policy (Logue et al., 1976). It is therefore important for policymakers in East and Southeast Asian countries to assess the possibility of stock market integration within this region to anticipate the future risks associated with economic integration as well as to build collective regional institutions (Wang, 2004). Click and Plummer (2005) also argued that integrated stock markets is more efficient than nationally segmented equity markets, and the efficiency of Asian capital markets has been questioned in particular after the 1997 Asian financial crises. Yet, the empirical evidence on the extent of financial integration among ASEAN+3 member countries has been limited and inconclusive. This study is therefore an attempt to investigate the recent development of ASEAN+3 equity markets integration. Practical implications – This study focuses its attention on the existence and the extent of financial integration in East and Southeast Asia region, and it provides evidence that equity market integration in ASEAN+3 is far from complete, and for that reason, there is a need for policymakers in ASEAN+3 member countries to synchronize their standards and regulations. Furthermore, the policymakers in East and Southeast Asia can gain benefit from this study, as it provides the evidence that ASEAN+3 member countries respond differently to policy shocks, which may hinder the development of regional financial integration as well as the policy effectiveness of region-wide authority in ASEAN+3. Originality/value – This research is different from previous studies, as it puts the regional financial integration within the context of ASEAN+3 frameworks. Unlike previous research that considers East and Southeast Asian countries as an individual entity, this research considers East and Southeast Asia into two different blocks, following Tourk (2004) who documented that negotiation process for ASEAN+3 financial integration is conducted in sub-regional level (ASEAN vs East Asia), rather than national level (country per country basis). Second, this study covers the period after the 1997 Asian financial crisis. As suggested in Wang (2014), that the degree of stock market integration tends to change around the periods marked by financial crises, the updated study on Asian financial integration in the aftermath of 1997 financial crises is important to document the development of regional financial integration.

English as an Asian Lingua Franca: the ‘Lingua Franca Approach’ and implications for language education policy

Abstract The major issues confronting language policy makers in East and Southeast Asia typically include balancing the need for English as the international lingua franca and language of modernization, a local lingua franca as the national language for national unity, and local languages as languages of identity and community. Choices faced by policy makers include which languages to use as media of instruction and when, and how to ensure that the languages complement each other rather than compete with each other. In this paper, particular focus will be placed on the countries which make up the Association of Southeast Asian Nations (ASEAN), especially in light of the recently ratified ASEAN charter which enshrines the position of English as the sole working language of the organisation. The perceived need for the importance of English has resulted in the current and increasing regional trend to include English as early as possible in the primary school curriculum, often as a medium of instruction. Even with this increase in English in the government school system, parents will often make substantial financial and emotional sacrifices and choose to send their children to private schools (including those overseas), where they can be taught through English. “To actually forsake the public school system that teaches in your own language for the private one that teaches in English is an increasingly common phenomenon” (Wang Gungwu 2007: xiv). A major consequence of these moves towards the learning of English in both public and private education systems is that local Asian languages are overlooked in the school curricula. Indeed it is hard to find a single government education system in ASEAN which requires the teaching of any of the languages of its fellow member states. The exception is Mandarin, which is increasing in demand through its rising instrumental value. While accepting that English needs to be taught, it will be argued that it is essential that the perceptions that are leading to the trends outlined above be challenged. A proposal for ways of combining English and local languages in more equitable and effective ways will be presented and a ‘Lingua Franca Approach’ to teaching English will be proposed.

HIV/AIDS: Eastern Europe

![Figure][1] CREDIT: MALCOLM LINTON “Why is AIDS almost nonexistent in the Soviet Union?” asked a 1991 news story in Science , headlined the “Russian AIDS Puzzle.” The story (13 September 1991, p. 1214) offered no good explanation for why the epidemic, then a decade old, had spared Eastern Europe and Central Asia but speculated that the dissolution of the Soviet Union might pave the way for HIV. It did. Today, the region is home to an estimated 1.5 million HIV-infected people, and the rate of spread remains dauntingly high. From 18 to 23 July 2010, more than 20,000 HIV/AIDS researchers will gather in Vienna, Austria—the “gateway” to Eastern Europe—for the 18th International AIDS Conference to try to bridge the gap between scientists and policymakers in East and West. In this issue, Science looks closely at the factors that in the mid-1990s led to the rapid spread of HIV in Russia and Ukraine, which account for more than 90% of the infections in the region. With a travel grant from the Open Society Institute's Public Health Program, correspondent Jon Cohen and photographer Malcolm Linton visited researchers, clinicians, advocates, and affected communities in both countries. The package of stories that begins on p. [160][2] examines how public health officials, health-care workers, researchers, and members of civil society in different regions have responded to the epidemic, as well as the criticisms that the governments have done too little to slow the spread of the virus. The central dilemma is that HIV in the region has been mainly transmitted by injecting drug users sharing needles, and the “harm reduction” strategies successfully used in Western Europe and elsewhere, such as needle exchange or opiate-substitution treatment, have not taken root in the more conservative climate of the East. Critics charge that stigma and discrimination against drug users by government officials, law enforcement, and the medical community have fueled the problem. A slideshow published online further captures some of the challenges in the region and how they are being addressed. Building a strong response to HIV/AIDS takes several years in almost every country. But Russia, Ukraine, and their neighbors have an advantage: They can learn from the many other countries that began confronting the virus more than a decade before it hit Eastern Europe. The News package is followed by Policy Forums and original research about the field's most pressing topics, which will take center stage at the upcoming conference. Girard and colleagues (p. [147][3]) advocate for the importance of a renewed commitment to universal access to prevention, treatment, and care. Jewkes (p. [145][4]) discusses the continuing contribution of gender inequities to the prevalence of HIV/AIDS in women, especially in South Africa. A Review by Trono et al. (p. [174][5]) focuses on the latent viral reservoir that persists in HIV-infected people, describing the underlying biology and potential interventions that may lead to a cure. A report by Wu et al. ( Science Express) describes a trio of new broadly neutralizing antibodies isolated from an HIV-infected person that attach to the CD4 binding site of the virus and can potently neutralize a broad range of viral strains. [1]: pending:yes [2]: /lookup/doi/10.1126/science.329.5988.160 [3]: /lookup/doi/10.1126/science.1193294 [4]: /lookup/doi/10.1126/science.1193794 [5]: /lookup/doi/10.1126/science.1191047