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“Every cloud has a silver lining”; to what extent does the Arab Spring accelerate the integration among Arab monarchies?

Bouoiyour, Jamal and Selmi, Refk and Miftah, Amal (2015): “Every cloud has a silver lining”; to what extent does the Arab Spring accelerate the integration among Arab monarchies?

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Abstract

This study fleshes out the role that may play the Arab revolution in strengthening regional integration. It rigorously assesses the extent of change in the degree of financial interdependence among Arab Monarchies (i.e., Arab Gulf countries, Jordan and Morocco) with the onset of the Arab Spring events. Our results reveal a significant time-varying volatility spillover effects, highlighting a greater interdependency across the focal Arab stock markets. It is also well shown that compared to the Morocco, there is a higher degree of financial integration of Jordan vis-à-vis the Gulf countries. Notably, a different integration patterns arises when accounting for the aftermath of revolution. Under the post-uprisings period, the stock market correlation between Morocco and Gulf countries increase substantially to values as high as the ones of Jordan. This implies that the Arab Spring has changed the nature of shock transmission between these countries, and thus may be perceived as a revival of integration.

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