مرکز منطقه ای اطلاع رساني علوم و فناوري - A STUDY ON THE RELATIONSHIP BETWEEN INTERNATIONAL DEVERSIFICATIN, FINANCIAL CONTAGION, AND THE GLOBAL FINANCIAL CRISIS

Abstract :

The purpose of the study is the global financial crisis before, during and after the return correlations between developed and developing stock markets to demonstrate the benefits of international diversification, and whether it is valid to examine whether there is the effect of financial contagion. For this purpose, the study was carried out for 24 developed and 21 emerging market in the period of January 31 1990-21 September 2012. The results achieved show in the period before the financial crisis, the relationship between stock returns are relatively low, increased during the financial crisis, the fall in the period after the financial crisis, but is still high compared to the period before the financial crisis. Findings show that the benefits of international diversification is reduced during the financial crisis rather slightly increased in the period after the financial crisis, but it is still very low compared to the period before the financial crisis. The findings indicate evidence of the existence of financial contagion effects during the period of financial crisis between developed and emerging markets.