Multiple Regime Shifts: The Influence of ASEAN Politics on Financial Integration within South-East Asia

For the last two decades, a key policy objective of the Association of South East Asian Nations (ASEAN), to which it claims much success, has been the supra-national integration among the region’s financial markets. This paper critically appraises this claim by locating and estimating multiple structural breaks in two equity market-based indicators and by employing a method to examine the effects of the ASEAN decision-making regime on variations in South-East Asian equity prices. The main findings of the paper are that the majority of identified structural breaks coincide with regime shifts in the ASEAN decision-making mechanism but that the politics of the regimes has had little influence on supra-national integration of the region’s financial markets.