Business Review


This study uses the co-integration and error-correction techniques to examine the linkages between Pakistan and other capital markets of developed economies (US, UK, Japan, Australia and Canada); regional markets in South Asia (India, Sri Lanka), East Asia (Indonesia, South Korea, Singapore, Malaysia, Taiwan, Philippines) and EU (Austria, Belgium, Denmark, Germany, Italy and Czech) countries. The results indicate a long-run relationship between Pakistani stock market and most of the international markets during the sample period (1997 to 2004). However, the longrun linkages were comparatively stronger with developed and EU markets. The direction of linkages in most cases, are from other regional markets to Pakistan. The data depicted a long-run relationship both in the initial period of reforms (1997-2000) and in the later period of reforms (2001-2004). However, a market group based analysis indicated that the South Asian markets indicated comparatively stronger long run relationship with Pakistan. JEL classification: G18, G15


Reforms, International Financial Markets Integration



Creative Commons License

Creative Commons Attribution 4.0 International License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Published Online

February 22, 2021



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