Financial Integration of African and Asian Capital Markets During Pre- and Post-Global Financial Crisis

Amalendu Bhunia^1,

¹Professor, Dept. of Commerce Kalyani University, West Bengal – 741235, India

Cite this paper:
Amalendu Bhunia. Financial Integration of African and Asian Capital Markets During Pre- and Post-Global Financial Crisis. Journal of Finance and Economics. 2025; 13(1):57-62. doi: 10.12691/jfe-13-1-5

Abstract

The study examines the financial integration of African and Asian capital markets during the pre- and post-global financial crisis periods. Financial integration is essential for promoting economic growth, enhancing market efficiency, and enabling risk diversification across regions. The 2007-2008 global financial crises significantly disrupted global financial systems, altering capital flow dynamics and reshaping interregional linkages. This research investigates the degree of integration between African and Asian markets, exploring whether the crisis fostered stronger financial linkages or exacerbated existing disparities. Employing econometric techniques, including correlation analysis, Johansen cointegration tests, and vector autoregression (VAR) model, the study analyzes the averages of stock market indices from both regions. The findings reveal limited financial integration during the pre-crisis period, primarily due to regulatory barriers, underdeveloped financial infrastructure, and geopolitical factors. However, post-crisis, there is evidence of increased interdependence between African and Asian markets, driven by globalization, enhanced capital mobility, and policy reforms.

Keywords:
Financial Integration African Markets Asian Markets Global Financial Crisis Cointegration Vector Autoregression (VAR)

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