Elsevier

Emerging Markets Review

Volume 13, Issue 3, September 2012, Pages 268-282
Emerging Markets Review

The global financial crisis, financial linkages and correlations in returns and volatilities in emerging MENA stock markets☆

https://doi.org/10.1016/j.ememar.2012.01.006Get rights and content

Abstract

The 2007 United States financial crisis has developed into the most severe worldwide economic crisis since the 1927 Great Depression. In addition to its severe repercussion in North America and the European Union, the crisis has put pressure on emerging markets in general, and the Middle East and North Africa region in particular. For a better understanding of how the crisis affected the MENA region, we focus in this paper on the global and regional financial linkages between MENA stock markets and the more developed financial markets, and on the intra-regional financial linkages between MENA countries' financial markets.

Highlights

► We model the transmission channels of the global financial crisis on the MENA region. ► We highlight important aspects of financial contagion in the MENA stock markets. ► The Saudi market is the dominant market among the oil producing MENA markets. ► Among the non-GCC MENA markets, Egypt is the dominant market.

JEL classification

C320
G110
G150

Keywords

Financial crisis
Financial integration and contagion
MENA region

Cited by (0)

☆

An earlier version of this manuscript was presented at a conference on “Institutional, Corporate, and Individual Behaviors in Emerging and Subsistence Marketplaces” Aix-en-Provence, France, 1–2 September, 2011. The author is grateful to the editor of the journal, two anonymous referees and several conference participants for very constructive comments and suggestions. The author is also grateful to Mario Rached for superb research assistance. Financial support from the Institute of Financial Economics of the American University of Beirut is gratefully acknowledged.

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