Dampak integrasi sektor keuangan terhadap saving augmentation, financial risk, dan financial deepening di ASEAN-3.

Abstract

ABSTRACT The direct impact of international financial integration was affecting the growth economic through increasing augmentation of domestic savings, lower cost of capital due to better risk allocation, transfer of technology, and development offinancial sector. Indirectly, it can be create a specialization in production, inducement and enhancement of capital inflows by signaling better policies (Prasad et. al). One of the implementation of economic integration in Southeast Asia is the ASEAN (AssociOon ofsouth East Asian Notions)f AfEAN as a forum for regional cooperation has experienced the transformation of political cooperation to the economic cooperation that is quite dynamic. The process ofeconomic union is done in stages, startingfrom the years 2008 to 2015 (AMA strategic schedule). The aim of this study is to analyze the direct impact of international financial integration. The countries of ASEAN-3 Malaysia, Indonesia, and Philippines- classified as middle income countries are usedfor the samples. The countries are more vulnerable to the impact ofthe external shocks. The sample starts in 1991 until 2009. The dependent variable is financial integration. The ratio ofcapital to the GDP accounts is usedfor the proxy offinancial integration, while, the independent variables are saving augmentation (SIGDP);financial risk (the interest rate derentialfrom the domestic and the overseas); andfinancial deepening (M21GDP). The Vector Autoregressive Regression (VAR) with error eorrfq#on model is use4 to analyze the data. Based on the results ofthe estimation, the conclusion can be drawn that the impact of the financial integration through saving augmentation, financial risk, and,fnancial deepening is not robust, since not every country has a direct impact to the domestic. This is a challenge for countries in ASEAN to balance the positive impact, either directly or indirectly from the flow of capital and the potential negative macroeconomic stability in individual countries and regions, both in the long term and in the short term. It is time for ASEAN to collectively increase its role in the eyes ofthe world still consider the benefitsfor the domestic economy to achieve economic union (ASEAN Economic CommunitylMEA) in 2015. Keywords: Financial Integration, Saving Augmentation, Financial Risk, Financial Deepening, ASEAN--3, VAR