Regional Business Cycle Synchronization in Emerging and Developing Countries: Regional or Global Integration? Trade or Financial Integration?

Chi Gong () and Soyoung Kim
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Chi Gong: Sichuan University

No GRU_2017_014, GRU Working Paper Series from City University of Hong Kong, Department of Economics and Finance, Global Research Unit

Abstract: This paper examines the effects of regional versus global integration and trade versus financial integration on regional business cycle synchronization in three regions containing developing and emerging countries (East Asia, Latin America, and Central and Eastern Europe). The main empirical results are as follows: (1) strong and similar common global linkages, especially financial linkages, have significant positive effects on the synchronization of regional business cycles; (2) after controlling global linkages, regional trade integration has a positive effect on regional business cycle synchronization, whereas regional financial integration has a negative effect; and (3) although the direction for the effect of each type of integration is similar across regions, the relative importance of each in explaining regional business cycle synchronization is different. Specifically, while global financial linkages play the most important role in East Asia and Latin America, regional trade integration is most important in Central and Eastern Europe.

Keywords: regional business cycle synchronization; regional and global economic integration; trade and financial integration; emerging and developing countries (search for similar items in EconPapers)
Pages: 41 pages
Date: 2017-09-09
New Economics Papers: this item is included in nep-int, nep-mac and nep-sea
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Citations: View citations in EconPapers (2)

Published in Journal of International Money and Finance, Volume 84, June 2018, Page 42-57

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https://www.cb.cityu.edu.hk/ef/doc/GRU/WPS/GRU%20%232017-014%20Gong%20Kim.pdf (application/pdf)

Related works:
Journal Article: Regional business cycle synchronization in emerging and developing countries: Regional or global integration? Trade or financial integration? (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:cth:wpaper:gru_2017_014

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