Munich Personal RePEc Archive

Globalization and Financial Market Contagion: Evidence from Financial Crisis and Natural Disasters

Asongu, Simplice (2013): Globalization and Financial Market Contagion: Evidence from Financial Crisis and Natural Disasters. Published in: Financial Aspects of Recent Trends in the Global Economy, ASERS Publishing , Vol. 1, No. 1 (June 2013)

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Abstract

With financial globalization, investors can gain from diversification if returns from financial markets are stable and not correlated. However with volatility spillovers, increase in cross-market correlations exist as a real-effect and are not taken into account for asset allocation and portfolio composition. This chapter assesses financial contagion from two recent trends in the world economy: the global financial crisis and the 2011 Japanese natural disasters (tsunami, earthquake and nuclear crises).

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