Exploring international economic integration through Sukuk market connectivity : a network perspective.

Abstract

This paper aims to measure the degree of international financial and economic integration through sukuk markets among the eight sukuk issuing countries for the period of 2004–2014. In empirically modelling the study, the ‘standard perfect financial integration indicators’ (SPFII) developed by Arribas et al. (2011) are utilised. In doing so, the degree of financial openness of the sampled countries and the degree of the regularity of the financial connections between the sampled countries are measured. The results show that countries such as the UK, Saudi Arabia, Qatar, Bahrain, and the UAE seem to be more integrated in their individual measures, which were found to be more integrated in comparison to the other countries in the sample. However, the global indicators suggest that the entire economy of the sample is not in a state of stable integration, unlike as is suggested by the sukuk relationship.