Title: Composite indicator of systemic integration for Southern African development community

Authors: Girash Gungaram; Sunil K. Bundoo

Addresses: Department of Economics and Statistics, University of Mauritius, Avenue Des Colombes, Mont-Ida, Mauritius ' Department of Economics and Statistics, Faculty of Social Science, University of Mauritius, Reduit, Mauritius

Abstract: The aim of this paper is to provide a comprehensive overview of the level of integration of the financial markets of Southern African Development Community (SADC). This paper contributes to the literature by developing a new index to measure the degree and evolution of financial integration of SADC. The index is calculated by weighting together a set of indicators for financial integration from four financial market segments namely the banking, money, Treasury-bill and equity markets. The results displayed high volatility during the period under review. This volatility gives an indication that prices react quickly to new information. The results also indicate a time changing pattern of integration among the member countries and are also influenced by both internal and external factors influencing the financial system of SADC. Integration scores have increased for those countries that have implemented financial reforms. We recommend policymakers to formulate a proper framework for regional financial integration to guide the integration process smoothly and contain key realistic milestones.

Keywords: composite indicators of financial integration; SADC; integration index; financial integration; financial economics.

DOI: 10.1504/AAJFA.2024.139937

Afro-Asian Journal of Finance and Accounting, 2024 Vol.14 No.4, pp.474 - 495

Received: 18 Feb 2022
Received in revised form: 31 May 2023
Accepted: 21 Jun 2023
Published online: 12 Jul 2024 *

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