Globalization, financial crisis and contagion: time-dynamic evidence from financial markets of developing countries

Simplice Asongu

MPRA Paper from University Library of Munich, Germany

Abstract: Financial integration among economies has the benefit of improving allocative efficiency and diversifying risk. However the recent global financial crisis, considered as the worst since the Great Depression has re-ignited the fierce debate about the merits of financial globalization and its implications for growth especially in developing countries. This paper examines whether equity markets in emerging countries were vulnerable to contagion during the recent financial meltdown. Findings show: (1) with the exception of India, Asian markets were worst hit; (2) but for Peru, Venezuela and Columbia, Latin American countries were least affected; (3) Africa and Middle East emerging markets were averagely contaminated with the exception of Kenya, Morocco, Dubai, Jordan and Lebanon. As a policy implication, India’s step-wise financial liberalization approach should be emulated. Lessons from Latin American fiscal and monetary policies should be learned and/or revised.

Keywords: Globalization; Financial crisis; Contagion; developing countries; Equity Markets (search for similar items in EconPapers)
JEL-codes: F30 G10 G15 (search for similar items in EconPapers)
Date: 2011-04-06
New Economics Papers: this item is included in nep-ifn
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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https://mpra.ub.uni-muenchen.de/30120/2/MPRA_paper_30120.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/30668/1/MPRA_paper_30668.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/37572/1/MPRA_paper_37572.pdf revised version (application/pdf)

Related works:
Journal Article: GLOBALIZATION FINANCIAL CRISIS AND CONTAGION TIME DYNAMIC EVIDENCE FROM FINANCIAL MARKETS OF DEVELOPING COUNTRIES (2012)
Working Paper: Globalization, financial crisis and contagion: time-dynamic evidence from financial markets of developing countries (2011)
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