How financially integrated are trading blocs in Africa?

Lumengo Bonga-Bonga, Queen Magadi Mabe

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)


This paper suggests a new methodology to measure the extent of financial integration between countries or regions based on the combination of the dynamic conditional correlation-general autoregressive conditional heteroscedasticity (DCC-GARCH) and factor models. Unlike previous methodologies, this proposed methodology is able to assess whether countries decouple from the regional factor. The methodology is applied to assess the degree of financial integration between three African trading blocs, namely, the Common Market of Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC). The results of the empirical analysis show that not all countries within each of the three trading blocs are integrated to their regional factors. Moreover, the finding of the paper shows a ‘decoupling’ between some of the trading blocs.

Original languageEnglish
Pages (from-to)84-94
Number of pages11
JournalQuarterly Review of Economics and Finance
Publication statusPublished - Feb 2020


  • African trading blocs
  • DCC-GARCH model
  • Factor model
  • Financial integration

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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