This paper examines the impact of financial integration on economic growth in Southeast Asia over the period 1993-2013. This paper further investigates whether the relationship depends on the level of financial and economic development, government corruption, and macroeconomic policy. These questions raise important issues both from a theoretical and a policy perspective. We employ the generalized methods of moment (GMM) in the dynamic panel estimation framework to analyse several factors, including initial income, initial schooling, financial development, inflation, trade openness, corruption, and financial crisis. The study further analyzes the data using the EGLS model to examine the consistency of the GMM model. We found that financial integration has a significant positive effect on economic growth in Southeast Asia. Our findings suggest that increasing financial integration could improve the productive capacity of the economy, including more investments and efficient allocation of capital, and thus enhancing economic growth in this region. More specifically, the results suggest that the government should work towards eliminating corruption and stabilizing macroeconomics in order to enhance financial integration and economic growth. This paper sheds new insights on a better evaluation of the past and present theorizing on the subject of financial integration and economic growth; especially, in Southeast Asia.

This study examines the behaviour of staple food price using Multivariate BEKK-GARCH Model. Understanding of staple food price behaviour is important for determining the unpredictability of staple food market and also for policy making. In this paper, we focus on the commodity prices of sugar, rice, soybean and wheat to examine the volatility behaviour of those commodities. The empirical results show that the own-volatility spillover are relatively significant for all food prices. The own-volatility spillover effect for sugar price is relatively large compared with the volatility spillover of other staple food commodities. The findings also highlight that the price volatility of wheat increases during food crisis more than it does when the condition is stable. Also, the own-volatility of rice and wheat in the period of the food crisis is significant and higher compared to the period before food crisis indicates that the past own-volatility effects during food crisis are relatively more difficult to predict because of the uncertainty and high price volatility. Policy recommendations that can be proposed based on the findings are: (1) a better trade agreement in food commodity trade, (2) Indonesia should not depend on wheat importation, and (3) early warning system to minimize food price volatility risks.