Financial integration in East Asia: Evidence from panel unit root and panel cointegration tests |
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Authors: | Cyriac Guillaumin |
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Institution: | CEPN, University of Paris 13, 99 Avenue Jean-Baptiste Clément, 93430 Villetaneuse, France;School of Advanced International Studies of the Johns Hopkins University, 40126 Bologna, Italy |
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Abstract: | The aim of this paper is to investigate the degree of financial integration for selected East Asian countries from 1988 to 2006 using the recently developed panel unit root and panel cointegration techniques. Investment and savings rates are found to be nonstationary and not to be cointegrated in panels. We estimate modified Feldstein–Horioka equations and our results reveal a high degree of financial integration. When we homogenize our data, results show that high-income countries have stronger financial integration than middle-income countries. Finally, we proceed to stability tests in order to test if there is a crisis effect and we find that financial integration is stronger in the post-crisis period. |
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