Financial Convergence of the Asia Pacific Developing Economies

Abstract

The financial markets of theAsia Pacific have remained resilient despite the lacklustre performanceof the global economy inrecent years. These markets have embarked on various initiatives that include regional monetaryand financial developments by promoting closer monetaryand financial cooperation . The purpose ofthis study is to measurethe degreeoffinancial convergence intheAsia Pacific especially relatingto developing countries , from the financial development perspective , as a resultof the cooperation . By applying panel data in financial terms, the hierarchical cluster results suggest the existence of convergence clubs among theAsia Pacific countries . Those countries that are relatively well-developed financially are found tohave converged, forming thericher-countries club. Meanwhile, those countries that arerelatively under-developed financially areless likely toconverge.Inthis respect, theAsia Pacificcountries should continue promoting regional financial cooperation for sustainable economic growth .The countrieswithrelativelyunderdeveloped financial systems need to pursue efforts towards financial services on a larger scale while thecountries with relatively well -developed financial systems should allow their financial servicestobeshared more broadly withinthe regionoverthecomingyears.