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The nexus between financial integration and real economy: Solow-growth model concept

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  • Rahman, Md. Saifur
  • Shahari, Farihana

Abstract

This paper aims to investigate the nexus between financial integration and the real economy in ASEAN+3 economies based on the concept of Solow-Growth Model. The equity indices as a proxy for financial markets are collected from each ASEAN+3 members and are segmented between two periods; before and after the financial cooperation agreement period. The finding presents several outcomes; 1) no cointegration nexus is found in the system during the pre-agreement periods; 2) the markets are found cointegrated during the post-agreement period, 3) financial integration is found to influence the real sectors of ASEAN+3 economies. Finally, this study offers policy implications to improve financial integration for stabilizing the real economy.

Suggested Citation

  • Rahman, Md. Saifur & Shahari, Farihana, 2017. "The nexus between financial integration and real economy: Solow-growth model concept," Research in International Business and Finance, Elsevier, vol. 42(C), pages 1244-1253.
    • Handle: RePEc:eee:riibaf:v:42:y:2017:i:c:p:1244-1253
    DOI: 10.1016/j.ribaf.2017.07.062
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    3. Hui Zhang & Yuyao Qian & Liying Yu & Zheng Wang, 2020. "Integrated Development of Information Technology and the Real Economy in China Based on Provincial Panel Data," Sustainability, MDPI, vol. 12(17), pages 1-17, August.

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    More about this item

    Keywords

    Financial integration; ASEAN+3; Real economy; Generalized method of moments (GMM);
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F3 - International Economics - - International Finance
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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