Dynamic convergence in equity markets: evidence from an open-developing economy
DOI: https://doi.org/10.3846/jbem.2026.26196Abstract
This paper examines the speed and stability of stock market convergence in an open developing economy, using Vietnam as the case. The study applies a β-convergence framework to weekly FTSE equity-indices from 2013 to 2025, estimating both full-sample and time-varying models, including sub-period regressions and rolling-window analyses. Structural change is addressed by separating pre-crisis, crisis, and post-crisis periods. The findings reveal three key insights. First, Vietnam’s equity market shows long-run convergence with regional benchmarks such as Korea, the Asia-Pacific, and emerging markets, but weaker linkages with advanced markets such as the United States (U.S.), the euro area (EMU), and Japan. Second, convergence speeds rose during the crisis period, indicating temporary synchronization with global markets, then fell sharply in the post-crisis phase. Third, regional linkages are more persistent, suggesting a reorientation toward intra-regional financial alignment. These results have important research implications for understanding dynamic financial integration and convergence asymmetries. From a policy perspective, they support strengthening regional financial cooperation to bolster resilience and market development in open developing economies.
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stock market convergence, β-convergence, emerging markets, financial integration, time-varying integration, regional financial linkagesHow to Cite
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Copyright (c) 2026 The Author(s). Published by Vilnius Gediminas Technical University.
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