Spatial Contagion of Global Financial Crisis
AbstractThe global financial crisis triggered by the credit crisis in the USA as its epicenter, quickly spread across the globe. The crisis starts spreading around the world in the middle of 2007 and along the 2008, where stock markets in major economies fell, followed by collapses of large companies and leading financial institutions. In a world where economies are integrated, the spread of such crisis is unavoidable. In this paper, we try to estimate the spill over effect of the global financial crises across borders and regions. Using spatial econometrics method we employ distance based weight matrix to estimate the spatial dependence and spatial heterogeneity of the crises. On the sensitivity analysis, we also employ weights matrix that is corrected by the governance and the economic freedom index to shows how the virtual space of governance, economic institution and regimes affect the spread of the crises.
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Bibliographic InfoPaper provided by Department of Economics, Padjadjaran University in its series Working Papers in Economics and Development Studies (WoPEDS) with number 200906.
Length: 16 pages
Date of creation: Aug 2009
Date of revision: Aug 2009
Global Financial Crises; Spillover Effect; Institutions; Globalization; Spatial Econometrics;
Find related papers by JEL classification:
- G1 - Financial Economics - - General Financial Markets
- C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-08-22 (All new papers)
- NEP-FMK-2009-08-22 (Financial Markets)
- NEP-GEO-2009-08-22 (Economic Geography)
- NEP-RMG-2009-08-22 (Risk Management)
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