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Alternative Approaches to Achieve East Asian Financial Integration: Evidence from Stock Prices

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Author(s)
Lee, Jong-Ha Hwang, Jin-Young
Issued Date
2020-04
Keyword
East Asia Financial Market Integration Stock Price Structural VAR
Abstract
Purpose – This study provides some alternative approaches to financial integration in East Asia using stock price indices and a structural VAR model. Design/methodology/approach– The model considers that the stock price indices are subjected to three types of shocks, such as global, regional, and domestic shocks. In addition, three integrating scenarios are suggested, namely Scenario A: "ASEAN + 1," Scenario B: "Southeast Asia (ASEAN) + Northeast Asia," and Scenario C: "simultaneous integration in East Asia. Findings– The estimation results indicate that gradational integration does not seem to be effective based on the OCA theory. Nevertheless, countries with higher levels of financial development, such as Japan, Singapore, and Hong Kong, may be desirable candidates for financial market integration at the same time (Scenario C). In some countries, gradual integration between countries with similar financial development and openness may be effective (Scenario A). The financial integration among Northeast Asian countries (Scenario B) is estimated to be inefficient. Research implications or Originality– The results of this study provide useful information about the process of promoting financial cooperation in the region, along with recommendations for the financial policies of East Asian countries.
Alternative Author(s)
이종하 황진영
Department
Dept. of International Trade
Publisher
한국무역연구원
Citation
Lee, Jong-Ha. (2020-04). Alternative Approaches to Achieve East Asian Financial Integration: Evidence from Stock Prices. 무역연구, 16(2), 1-18. doi: 10.16980/jitc.16.2.202004.1
Type
Journal paper
ISSN
2384-1958
DOI
10.16980/jitc.16.2.202004.1
URI
https://oak.chosun.ac.kr/handle/2020.oak/18916
Appears in Collections:
Dept. of International Trade > Lee, Jong-Ha
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