China Economic Research Center Working Paper Series
Anders C. Johansson
CHINA'S FINANCIAL MARKET INTEGRATION WITH THE WORLD
Abstract: It is commonly argued that China's financial markets are
effectively insulated from the rest of the world. To see if this is true
and to better understand China's financial development, we analyze China's
integration with major financial markets. Using conditional copulas, we
show that China has experienced an increasing level of integration with
several major financial markets during the last decade, even though the
country's financial markets are commonly seen as being insulated.
Furthermore, the level of integration has increased with several major
markets during the current financial crisis. The results and possible
reasons for the increasing integration are analyzed and the implications
for policymakers and market participants are discussed.
Keywords: China; financial market integration; codependence; copula; (follow links to similar papers)
JEL-Codes: F30; G15; (follow links to similar papers)
27 pages, June 1, 2009
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