Rate of return of stock index and the NAFTA process: An analysis of North American and ASEAN financial markets

Document Type

Article

Publication Date

1-1-2000

Abstract

This study analyzes the effect of the North American Free Trade Agreement (NAFTA) process on two major segments of the world economy. Specifically, daily stock index returns in the North American markets and the selected Association of South East Asian Nations (ASEAN) markets during the entire agreement process are employed to analyze several NAFTA related events and their effect on respective financial markets. Using an event-study framework, dummy variable regression analysis reveals that the significance of the events on each country appears random in nature. Joint testing of events, however, shows that except for Singapore, the overall effect of NAFTA is significant on the stock index returns of all countries. © MCB UP Limited 2000.

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