134
Muharam, H., Wisnu, M., Arfinto, E. D., & Najmudin. (2019). Volatility
spillovers under difference in the degree of market integration: Evidence from
the selected Asian and Eastern European stock markets. Journal of International
Studies, 12(1), 134-150. doi:10.14254/2071-8330.2019/12-1/9
Volatility spillovers under difference in
the degree of market integration:
Evidence from the selected Asian and
Eastern European stock markets
Harjum Muharam
Faculty of Economics and Business, Universitas Diponegoro,
Indonesia
hardjum@gmail.com
Wisnu Mawardi
Faculty of Economics and Business, Universitas Diponegoro,
Indonesia
wisnumawardi@gmail.com
Erman Denny Arfinto
Faculty of Economics and Business, Universitas Diponegoro,
Indonesia
erman.denny@gmail.com
Najmudin
Faculty of Economics and Business,Universitas Jenderal Soedirman,
Indonesia
kuliah_najmudin@yahoo.co.id
Abstract. This research aims to investigate volatility transmitted from the world
market to ten Asian and Eastern European stock markets and from major stock
market in the region to the rest of stock markets by considering their degree of
integrations. To assess this, we apply GARCH(p,q) model and involve dynamic
conditional correlation (DCC) model to generate the dynamic degree of
integration. The monthly market indices data over the period from May 2002 to
March 2018 are taken from 11 markets -- 5 Asian ones (China, Indonesia,
Malaysia, Pakistan, and the Philippines), 5 Eastern European (Czech Republic,
Poland, Romania, Russia, and Ukraine), and the world market data.
Furthermore, the volatility spillover was analysed during the global financial
crisis period, from May 1, 2008 to May 29, 2009. The findings show that
volatility spillovers from the world and the major regional markets to domestic
stock markets are conditional on the degree of integrations. Specifically, there is
no volatility spillover from the world and regional major markets on segmented
Received:
September, 2018
1st Revision:
October, 2018
Accepted:
January, 2019
DOI:
10.14254/2071-
8330.2019/12-1/9
Journal
of International
Studies
Scientific Papers
© Foundation
of International
Studies, 2019
© CSR, 2019