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Financial Integration, Inclusion and Stability During Crises: Insights from the MENA Region

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  • Samar Abdelmageed

    (The British University in Egypt)

Abstract

The main objective of this paper is to analyze the interrelationships between financial integration, inclusion, and stability in the Middle East and North Africa (MENA) region and the role of crises in these linkages. This is the first study attempting to examine the interrelations among these variables in MENA financial markets. To achieve its objective, the paper starts by assessing regional integration among MENA stock markets using correlational analysis and the DCC GARCH models. Then, it builds a PVAR model to examine the relationships between integration, inclusion, and stability in the MENA region. The results show that regional integration is still limited in the MENA region, despite growing linkages with other international markets. Regional integration in the MENA region is more pronounced among countries that lie within closer geographical proximities. Moreover, crises, whether financial or political, also tend to increase regional correlations and linkages among MENA markets, although the impact of financial crises is higher compared to that of political instabilities. The analysis highlighted the positive short-term impacts of regional integration on inclusion in the MENA region; however, these impacts could not be maintained for longer periods. In contrast, international integration had negative effects on inclusion and stability that diminished over time. No linkages were found between financial inclusion and stability in the MENA region

Suggested Citation

  • Samar Abdelmageed, 2021. "Financial Integration, Inclusion and Stability During Crises: Insights from the MENA Region," Working Papers 1518, Economic Research Forum, revised 20 Dec 2021.
    • Handle: RePEc:erg:wpaper:1518
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    Cited by:

    1. Ali Almeshari & Mohamed Hisham Bin Dato Haji Yahya & Fakarudin Bin Kamarudin & Rosalan Ali & Sha’ari Abd Hamid, 2023. "Liquidity Creation, Oil Term of Trade Shocks, and Growth Volatility in Middle Eastern and North African Countries (MENA)," Economies, MDPI, vol. 11(5), pages 1-26, May.

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