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Does global financial crisis impact on East Asian export?

By: Tran Pham Hoai Trinh - VNP 17

Supervisor: Dr. Dinh Cong Khai

The global financial crisis in 2008 was initially a single crisis in the US subprime market. After very short time, the crisis has quickly escalated and spread its impact to all over the world. As stated by UNDP, very quickly through international trade, the crisis has been transmitted from the West to the East. This paper aims to find out how this financial crisis impacts the trade of East Asian countries. More particularly, this paper tries to find out how, and to what extent, does the global financial crisis impact exports of East Asia. By studying the impacts of GDP, financial sector quality (measured by domestic credit), import demand on exports and by observing the change of these impacts before and after the global financial crisis, the effect of the global financial crisis on export will be identified. Data of exports, domestic credits and import demands are collected from 2001 to 2010 for 8 countries in East Asia. The data is balanced from country to country, then balanced panel data will be used for model testing. Moreover, the Hausman test used to test the panel data is significant with fixed effect model. The results finally show that the global financial crisis started in 2008 has not changed impact’s magnitudes of GDP, financial sector quality and imports demand on exports of East Asia during crisis.

Keywords: Global financial crisis, International production fragmentation, Triangular trade network, Financial integration