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Regional pull vs global push factors: China and US influence on Asian financial markets

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  • Shu, Chang
  • He, Dong
  • Dong, Jinyue
  • Wang, Honglin

Abstract

This paper compares spillovers from the US and Chinese financial markets to markets in Asia and the Pacific. Structural VAR analysis points to the important influence of Chinese equities and currency movements. In normal times China’s influence in the equity market has risen to a level close to that of the United States, although the relative impact of the United States became stronger in crisis periods. Nonetheless, China’s bond market remains a negligible player. China's role may be interpreted as a “regional pull” factor, while that of the United States remains a key “global push” factor.

Suggested Citation

  • Shu, Chang & He, Dong & Dong, Jinyue & Wang, Honglin, 2018. "Regional pull vs global push factors: China and US influence on Asian financial markets," Journal of International Money and Finance, Elsevier, vol. 87(C), pages 112-132.
  • Handle: RePEc:eee:jimfin:v:87:y:2018:i:c:p:112-132
    DOI: 10.1016/j.jimonfin.2018.04.004
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    Keywords

    China’s spillovers; Asia financial markets; US spillovers; Structural VAR; Sign restrictions;

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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