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The collapse of the Malaysian exchange rate and the stock market during the Asian financial crisis had elevated uncertainties in the financial market and increased the instability of the bank stock returns. Whilst it is commonly known that the crisis rooted from a complex interplay of various factors, there seemed to exist some fundamental and systemic problems in the banking sector. Besides, the challenges from the wave of financial globalization also urged the authorities to conduct structural enhancement in the sector. This paper briefly outlined the main aspects of the Malaysian bank merger program, and tracked as well as evaluated the effects of the program on the volatility of the Malaysian bank stock returns. It was found that the proposed merger did bring about stability for the banks’ stock prices and returns, especially after the initial consolidation announcement of 29 July 1999 based on the estimations of conditional variances. The analysis also documented a persistency positive risk returns tradeoff and asymmetrical news effects in the bank stocks before the announcement. After the announcement, bank stocks clearly enjoyed a huge reduction in the volatilities and the asymmetrical news effects.

The objective of this paper is to assess the relative efficiency of 12 selected Asia Pacific countries in their development of knowledge‐based economies (KEs).

The performances of the selected countries are evaluated using data envelopment analysis (DEA).

The DEA scores indicate that four of the emerging countries (India, Indonesia, Thailand and Mainland China) are relatively inefficient in K‐E development compared to the other eight which are equally efficient. The main reason for their backwardness is due to the outflow of their human capital resource to the developed countries. This seriously undermines the level of their K‐E development compared to their counterparts. The results also indicate that knowledge dissemination is generally not a serious problem, except for India.

The results and the discussion should be taken as the first step in an analysis which warrants further research. The knowledge clusters identified earlier could suggest that the k‐economy may be better studied by its components where the more diagnostic versions of the DEA model can be applied.

The importance of this study however, is not so much the immediate result which highlights comparative efficiencies, but rather that DEA is a workable model which can take the study of KE further in investigating the contributory factors of KE.

This paper makes an original contribution because a comprehensive analysis of this type, of relative performance measures of the knowledge economy in the Asia Pacific countries, has not been done before using the quantitative technique of DEA.

The purpose of this study is to examine the factors of exchange rate volatility from the macroeconomic perspective for four neighbouring ASEAN economies.

This study has scrutinised the link between macroeconomic factors and exchange rate volatility in both the short and the long run by applying econometrics techniques.

This study further suggests the link between macroeconomic factors and exchange rate volatility in both the short and the long run for the selected economies. The empirical results, however, indicate that a set of common factors seems to influence the exchange rate volatility, whereby the stock market is a great influence commonly found across countries. The Indonesian rupiah seems to be the most sensitive to the innovations in macroeconomic factors, while the Singapore dollar is the least.

The macroeconomic factors are believed to be the forces behind exchange rate volatility through the presumable rigidities of their exchange rates, resulting from the managed float exchange rate system adopted by those countries. Their capital markets are vital in maintaining exchange rate stability, hence suggesting the imperative role of respective authorities and market players in managing a viable capital market.

Little attention has been given to developing countries' experiment with their exchange rate systems due to their presumed rigid volatility. This study adopts a more sophisticated approach in measuring the volatility of the exchange rate and examines the underlying factors of exchange rate volatility instead of the level of exchange rate.

Maintaining a low and stable inflation rate has become one of the challenges in the macroeconomic management of most countries. Among others, Malaysia has a very unique experience in terms of inflation. The economy has experienced episodes of high (1973‐1974, 1980‐1981) and low (1985‐1987) regimes of inflation, and was able to contain low and stable inflation during the high economic growth period of 1988‐1996. The objective of this study is to identify important factors that contribute significantly to inflation in Malaysia. This study also aimed to examine the possible existence of international and intra‐ASEAN inflation transmission to Malaysia. The analysis is carried out based on the time‐series approach of multivariate cointegration, vector error‐correction modeling, impulse response functions and variance decompositions. The empirical results of this study show that external factors such as exchange rate and the rest of ASEAN’s inflation are relatively more important than domestic factors in explaining Malaysian inflation.