Assessing financial convergence in developing countries: The case of D-8 countries
The European Union's regional integration serves as a model for blocs such as the D-8 Organisation for Economic Cooperation, which aims to enhance financial and economic integration. This study employs wavelet coherence analysis to examine the interrelations between exchange rates, bond yields,...
Saved in:
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2025-07-01
|
| Series: | Borsa Istanbul Review |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2214845025000547 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1849473445864144896 |
|---|---|
| author | Mervan Selcuk Mehmet Asutay |
| author_facet | Mervan Selcuk Mehmet Asutay |
| author_sort | Mervan Selcuk |
| collection | DOAJ |
| description | The European Union's regional integration serves as a model for blocs such as the D-8 Organisation for Economic Cooperation, which aims to enhance financial and economic integration. This study employs wavelet coherence analysis to examine the interrelations between exchange rates, bond yields, stock exchanges, the VIX, and oil prices in D-8 countries, utilizing daily data from 2010 to 2025 to assess financial convergence. The findings reveal dynamic and heterogeneous financial relationships. Türkiye, Indonesia, and Malaysia exhibit medium-term synchronisation between exchange rates and bond yields, while Bangladesh and Nigeria show inverse relationships. Stock markets also display varied interactions, with Indonesia and Malaysia demonstrating persistent negative correlations, while Türkiye shifts from synchronisation to an inverse relationship. More open economies, like Türkiye and Malaysia, demonstrate stronger coherence with global volatility (VIX), whereas controlled economies, such as Iran, show weaker responses. Although mid-to-long-term coherence suggests progress towards financial convergence, differences in market openness and policies hinder full integration. Policymakers should prioritize coordinating exchange rates, ensuring financial transparency, and harmonising regulations to strengthen stability in D-8 economies. Proactive risk management and regional policy coordination can mitigate the effects of global volatility. Enhancing financial linkages through cross-border investments and regional agreements will improve resilience and speed up convergence. |
| format | Article |
| id | doaj-art-bc814bacece149cb840b0752fde28ec3 |
| institution | Kabale University |
| issn | 2214-8450 |
| language | English |
| publishDate | 2025-07-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Borsa Istanbul Review |
| spelling | doaj-art-bc814bacece149cb840b0752fde28ec32025-08-20T03:24:07ZengElsevierBorsa Istanbul Review2214-84502025-07-0125470972110.1016/j.bir.2025.03.009Assessing financial convergence in developing countries: The case of D-8 countriesMervan Selcuk0Mehmet Asutay1Research Center for Islamic Economics and Finance, Faculty of Political Sciences, Sakarya University, TurkiyeDurham Centre for Islamic Economics and Finance, Durham University Business School, Durham University, Durham, UK; Corresponding author.The European Union's regional integration serves as a model for blocs such as the D-8 Organisation for Economic Cooperation, which aims to enhance financial and economic integration. This study employs wavelet coherence analysis to examine the interrelations between exchange rates, bond yields, stock exchanges, the VIX, and oil prices in D-8 countries, utilizing daily data from 2010 to 2025 to assess financial convergence. The findings reveal dynamic and heterogeneous financial relationships. Türkiye, Indonesia, and Malaysia exhibit medium-term synchronisation between exchange rates and bond yields, while Bangladesh and Nigeria show inverse relationships. Stock markets also display varied interactions, with Indonesia and Malaysia demonstrating persistent negative correlations, while Türkiye shifts from synchronisation to an inverse relationship. More open economies, like Türkiye and Malaysia, demonstrate stronger coherence with global volatility (VIX), whereas controlled economies, such as Iran, show weaker responses. Although mid-to-long-term coherence suggests progress towards financial convergence, differences in market openness and policies hinder full integration. Policymakers should prioritize coordinating exchange rates, ensuring financial transparency, and harmonising regulations to strengthen stability in D-8 economies. Proactive risk management and regional policy coordination can mitigate the effects of global volatility. Enhancing financial linkages through cross-border investments and regional agreements will improve resilience and speed up convergence.http://www.sciencedirect.com/science/article/pii/S2214845025000547Financial convergenceExchange rateBond yieldVIXD-8 countriesWavelet coherence |
| spellingShingle | Mervan Selcuk Mehmet Asutay Assessing financial convergence in developing countries: The case of D-8 countries Borsa Istanbul Review Financial convergence Exchange rate Bond yield VIX D-8 countries Wavelet coherence |
| title | Assessing financial convergence in developing countries: The case of D-8 countries |
| title_full | Assessing financial convergence in developing countries: The case of D-8 countries |
| title_fullStr | Assessing financial convergence in developing countries: The case of D-8 countries |
| title_full_unstemmed | Assessing financial convergence in developing countries: The case of D-8 countries |
| title_short | Assessing financial convergence in developing countries: The case of D-8 countries |
| title_sort | assessing financial convergence in developing countries the case of d 8 countries |
| topic | Financial convergence Exchange rate Bond yield VIX D-8 countries Wavelet coherence |
| url | http://www.sciencedirect.com/science/article/pii/S2214845025000547 |
| work_keys_str_mv | AT mervanselcuk assessingfinancialconvergenceindevelopingcountriesthecaseofd8countries AT mehmetasutay assessingfinancialconvergenceindevelopingcountriesthecaseofd8countries |