ABSTRACT
Ever since the formation of SAARC, South Asia has remained one of the least integrated regions in the world. In this context, we examine the dynamic nature of equity market linkages for the South Asian countries. Copula GARCH models and Diebold and Yilmaz methodology have been employed to study the inter-temporal process of equity market integration of SAARC member countries. Empirical results show that the sample countries of the region exhibit very little or no levels of integration between them. Equity portfolio flows within the South Asian region reconfirm this trend for low integration in the region. Flow-based indicators reconfirm that the quantum of equity portfolio inflows for individual SAARC members is much greater from ASEAN+6 group than from the SAARC group. However, India seems to receive equity portfolio flows only from the larger ASEAN+6 group and none whatsoever from the SAARC region but it is itself invested in the SAARC group members.
