Asian Economic Integration Report 2017:

Abstract

Some rights reserved. Published in 2017. Publication Stock No. TCS179038-2 DOI: http://dx.doi.org/10.22617/TCS179038-2The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent.ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. The mention of specific companies or products of manufacturers does not imply that they are endorsed or recommended by ADB in preference to others of a similar nature that are not mentioned.By making any designation of or reference to a particular territory or geographic area, or by using the term "country" in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area. This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) https://creativecommons.org/licenses/by/3.0/igo/. By using the content of this publication, you agree to be bound by the terms of this license. For attribution, translations, adaptations, and permissions, please read the provisions and terms of use at https://www.adb.org/terms-use#openaccess This CC license does not apply to non-ADB copyright materials in this publication. If the material is attributed to another source, please contact the copyright owner or publisher of that source for permission to reproduce it. ADB cannot be held liable for any claims that arise as a result of your use of the material.Please contact pubsmarketing@adb.org if you have questions or comments with respect to content, or if you wish to obtain copyright permission for your intended use that does not fall within these terms, or for permission to use the ADB logo. Notes:In this publication, "$" refers to US dollars. Corrigenda to ADB publications may be found at http://www.adb.org/publications/corrigenda ADB recognizes "China" as the People's Republic of China; "Hong Kong" as Hong Kong, China; and "Korea" as the Republic of Korea. AEIR 2017 includes a Theme Chapter on how best to enhance regional financial resilience as global financial systems become more interconnected. "The Era of Financial Interconnectedness: How Can Asia Strengthen Financial Resilience?" examines the structural weaknesses of the region's financial systems, existing and emerging vulnerabilities, and the implications of increasingly more pronounced and procyclical financial cycles and financial interconnectedness. It investigates the evolution of financial networks and various channels through which financial shocks can be transmitted. And it specifically cites the region's overreliance on external funding (largely denominated in US dollars) as one of many sources of potential vulnerability should the global financial cycle reverse and dollar liquidity tighten. CONTENTSHowever, the Theme Chapter also shows that-20 years after the 1997/98 Asian financial crisiswide-ranging reforms helped b...

Stock Market Linkages and Spillover Effects: An Empirical Analysis of Select Asian Markets

“…The volatility of Asian equity market returns is explained more by variations in global than regional equity market returns and this trend is getting further more prominent from 2015 onwards. This supports relatively higher integration of Asia's equity markets with global market than regional one [18]. Portfolio investors of Asia kept on investing more outside than within the region which is evident from more than 9% increment in outward equity investment outstanding from 2015 to 2016 (from $3.2 trillion in 2015 to $3.5 trillion in 2016).…”