What Drives Financial Crises in Emerging Markets?

The consequences of the recent financial crises during the last two decades showed how important it is to monitor financial performance and try to predict a coming crisis. In an effort to predict a coming crisis, the authors calculate a vulnerability index based on a number of financial and economic indicators. This chapter analyzes the financial vulnerability of sixteen emerging countries as these countries are more vulnerable to financial fluctuations. The findings show that Peru, Russia, Indonesia, and Thailand are less vulnerable to a crisis, whereas, South Africa, Turkey, India, Egypt, and Hungary are more vulnerable to a crisis.

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Reallocation effects of recessions and financial crises: an industry-level analysis

The B E Journal of Macroeconomics ◽

10.1515/bejm-2015-0082 ◽

2016 ◽

Vol 16 (2) ◽

Author(s):

Fabrizio Coricelli ◽

Aikaterini E. Karadimitropoulou ◽

Miguel A. Leon-Ledesma

Keyword(s):

Emerging Markets ◽

Emerging Economies ◽

Financial Crises ◽

Value Added ◽

Developed Countries ◽

Large Set ◽

Allocation Of Resources ◽

Developed Economies ◽

Manufacturing Sectors ◽

Level Analysis

AbstractWe characterize the behavior of disaggregate manufacturing sectors for a large set of developed and emerging markets around recession dates. We uncover some relevant stylized facts. The dispersion in value added (VA) growth rates in developed economies is counter-cyclical, whereas for emerging countries it is pro-cyclical. Recoveries are more productivity-driven in developed countries as opposed to employment-driven for emerging markets. Around recession episodes sectoral-level misallocation of resources does not significantly change in developed economies, whereas it increases in emerging economies during financial crises. Therefore, there is no evidence that recessions improve the allocation of resources across industries.

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Correlation, Contagion, and Asian Evidence

Asian Economic Papers ◽

10.1162/asep.2006.5.2.32 ◽

2006 ◽

Vol 5 (2) ◽

pp. 32-72 ◽

Cited By ~ 23

Author(s):

Mardi Dungey ◽

Renée Fry ◽

Vance L. Martin

Keyword(s):

Emerging Markets ◽

Financial Market ◽

Financial Crises ◽

Correlation Coefficients ◽

Equity Markets ◽

Empirical Literature ◽

Bond Markets ◽

Developed Markets ◽

Market Contagion ◽

Trade And Financial Linkages

This paper examines the empirical literature on financial market contagion in Asia during the 1997–98 financial crises with respect to existing tests of contagion. Empirical evidence shows that contagion affects both developed and emerging markets and does not seem to vary with the relative fundamental economic health or trade and financial linkages of the Asian economies. Contagion occurs across both asset types and geographical borders and tends to have larger effects in equity markets than in currency and bond markets. There is evidence to support the hypothesis that contagion is regional and transmitted through developed markets. A discussion of the behavior of correlation coefficients in the presence of contagion and financial crises suggests that they are not a reliable metric for detecting contagion.

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Explaining Financial Crises in Emerging Markets: A logit model on the Turkish data (1984-2001)

THE LAHORE JOURNAL OF ECONOMICS ◽

10.35536/lje.2005.v10.i1.a3 ◽

2005 ◽

Vol 10 (1) ◽

pp. 33-47

Author(s):

Mete Feridun

Keyword(s):

Emerging Markets ◽

Foreign Exchange ◽

Stock Prices ◽

Logit Model ◽

Financial Crises ◽

Terms Of Trade ◽

Gdp Per Capita ◽

Foreign Exchange Reserves ◽

Fiscal Balance ◽

Per Capita

This article aims at explaining the financial crises Turkey experienced in the last decade through a random effects logit model which incorporates 26 macroeconomic, political, and financial sector variables. Evidence emerges that the only significant variables are current account/GDP, fiscal balance/GDP, GDP per capita, national savings growth, foreign exchange reserves, terms of trade, stock prices, and import growth. Results indicate that all variables have expected signs with the exception of import growth.

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