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Dynamic causal linkages between the US stock market and the stock markets of the East Asian economies
Jönköping International Business School, Sweden.
2010 (English)Report (Other academic)
Abstract [en]

This paper presents an empirical study in the dynamic causal relationships between each of national stock market of the East Asian economies (Hong Kong, Singapore, Korea(Rep.of), and Taiwan)and the U.S. stock market.This paper complements the existing studies by analyzing the dynamic causal relationship between the U.S. stock market and the East Asian stock markets at different time scales by employing wavelet analysis. Analyses of pre-crisis, East Asian financial crisis(year 1997-2000), inter-crisis and the subprime mortgagecrisis (year 2007-2009) periods are conducted to compare the international transmission mechanism of stock market movements.The main empirical insight is that the causal relationship is strongerat finer time scales, whereas the relationship is less and less apparent at longer time horizons.The empirical evidence of the current study indicatesthat the U.S. stock market Granger-causes almost all the East Asian stock markets regardless of non-crisis periods or not, yet itapplies only to the later two sub-sample periods. In general, the empirical results show that short-run causal linkages of the U.S. market to the East Asian economies are more dominantthan the causal linkages of the other direction. The results also showthat those stock marketsare more integrated after the East Asian financial crisisperiod. Innovations in the U.S. market aretransmitted to the stock markets of the East Asian economies in a similar fashion, whereas the degree of responsiveness of those East Asian stock markets differsbetween the inter-crisis period and the subprime mortgagecrisis.

Place, publisher, year, edition, pages
Stockholm, Sweden: KTH Royal Institute of Technology, 2010. , p. 23
Series
CESIS Electronic Working Paper Series ; 236
Keywords [en]
Wavelet analysis, Stock market, Granger causality
National Category
Economics
Research subject
Economy, Economics
Identifiers
URN: urn:nbn:se:lnu:diva-78373OAI: oai:DiVA.org:lnu-78373DiVA, id: diva2:1257175
Available from: 2018-10-19 Created: 2018-10-19 Last updated: 2018-10-22Bibliographically approved

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Kim, Hyunjoo

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf