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Linkages Between the Malaysian Stock Market and Some Selected Markets

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Author Info
Shaista Wasiuzzaman
Lim Ai Li
Abstract

Many researchers claim that the stock markets are getting more and more integrated. In other words, it is believed that there are stronger financial market linkages or co-movements among the stock markets around the globe. This paper attempts to determine whether there are financial market linkages or co-movements. Malaysia, Singapore, Japan and the US stock markets were screened in an attempt to obtain information about the linkages in stock markets. Three methods were used to examine the linkages or co-movements, namely, correlation analysis, cointegration analysis, and Granger causality test. The results of the correlation analysis suggest that financial market linkages are weak among the four countries undertaken in this study. Cointegration tests reveal that there is a long-run relationship as there is at most a single co-integrating vector. Finally, Granger causality test shows that most of the stock markets are influencing the other stock markets. Overall, the four stock markets seem to have financial market linkages or co-movements.

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Publisher Info
Article provided by Icfai Press in its journal The IUP Journal of Financial Economics.

Volume (Year): VII (2009)
Issue (Month): 1 (March)
Pages: 22-35
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Handle: RePEc:icf:icfjfe:v:07:y:2009:i:1:p:22-35

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This page was last updated on 2009-12-31.


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