Market Development, Sector Concentration, and Political Stability as Drivers of Stock Market Resilience Across Crisis Phases: Evidence from Six ASEAN Exchanges

Lim, Guat Qin (2026) Market Development, Sector Concentration, and Political Stability as Drivers of Stock Market Resilience Across Crisis Phases: Evidence from Six ASEAN Exchanges. Masters thesis, Tunku Abdul Rahman University of Management and Technology.

Text 23 Lim Guat Qin.pdf Restricted to Registered users only Download (1MB)

Abstract

Stock market resilience has become a growing concern following the recurrent global crises, which continuously expose the systemic fragility and vulnerability of global financial markets. Increasing global market integration and interconnectedness have further amplified the transmission of external shocks and systemic risks, particularly during periods of severe uncertainty and market disruptions. Although prior studies have extensively examined financial market performance and volatility behaviour, limited attention has been given to the multidimensional and phase-dependent nature of stock market resilience across the ASEAN markets. In addition, existing literature remains relatively limited in explaining how market development, sector concentration, and political stability influence resilience under different market conditions. Against this background, this study examines the direct and moderating roles of market development, sector concentration, and political stability on stock market resilience across selected ASEAN stock markets throughout the pre-crisis (2016– 2019), crisis (2020–2021), and post-crisis (2022–2025) periods. The study employs panel data analysis across Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. Stock market resilience is constructed using a multidimensional composite framework to capture different aspects of resilience dynamics across crisis phases. Importantly, the crisis-phase framework allows the analysis to examine market preparedness, shock absorption capability, and post-crisis recovery behaviour across different market environments. The findings reveal that the determinants of stock market resilience across the ASEAN markets demonstrates substantial phase-dependent and structurally heterogenous behaviour across different crisis environments. Market development does not consistently strengthen stock market resilience across different crisis periods where greater market integration may increase the exposure toward systemic risks and external shocks. In addition, sector concentration also demonstrates heterogenous and dual-effect relationships across markets and crisis phases, while political stability generally exhibits a resilience-supportive influence during relatively stable market conditions but weakens during severe crisis environments. Similarly, the moderating effects exerted by both sector concentration and political stability further indicate that stock market resilience depends not solely on the level of market development, but also on the quality of market structure, institutional conditions, and prevailing crisis environments. Overall, the findings reveal that stock market resilience across the ASEAN markets remains highly phase-dependent and structurally heterogeneous across different crisis environments. The results reinforce the importance of adopting a multidimensional and structurally grounder perspective when examining stock market resilience within increasingly interconnected financial markets. Furthermore, the findings provide important implications for policymakers, regulators, and investors regarding market structure, systemic vulnerability, and financial resilience across emerging ASEAN financial markets.