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Stock Market Interdependence and Trade Relations: A Correlation Test for the U.S. and Its Trading Partners

  • Steven Zongshin Liu

    ()

    (Professor, Department of Economics, Feng Chia University, Taiwan.)

  • Sophia Meiying Lai

    ()

    (Ph.D. Candidate, Department of Economics, Feng Chia University, Taiwan)

  • Kung-Cheng Lin

    ()

    (Associated Professor, Department of Public Finance, Feng Chia University, Taiwan.)

Registered author(s):

    Based on the well-established trade relations between the U.S. and its major trading partners, this paper examines the robustness of the trade relation hypothesis which, in some recent studies, argues that difference in trade relations among countries can significantly explain difference in the stock market interdependence. The generalized VDC analysis is employed to measure the stock market interdependence, and the correlation test with bootstrap procedure is applied to test the hypothesis. The results indicate that the hypothesis is hardly as a general rule.

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    Article provided by AccessEcon in its journal Economics Bulletin.

    Volume (Year): 7 (2006)
    Issue (Month): 5 ()
    Pages: 1-15

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    Handle: RePEc:ebl:ecbull:eb-06g10022
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