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The financial costs of the United States-China trade tensions: evidence from East Asian stock markets

Author

Listed:
  • Francesca de Nicola

    (World Bank)

  • Martin Kessler

    (World Bank)

  • Ha Nguyen

    (World Bank)

Abstract

This paper examines the impacts of United States-China trade tensions via the lens of East Asian stock markets. Studying 10 indices of the main East Asian stock markets, it finds that announcements of “trade war” escalation translated into 50 to 60 percent of the total declines in two major Chinese stock markets over the first eight months of 2018. In other words, in the absence of the “trade war” Asian stocks would have experienced half the decline, or they would have registered gains.

Suggested Citation

  • Francesca de Nicola & Martin Kessler & Ha Nguyen, 2020. "The financial costs of the United States-China trade tensions: evidence from East Asian stock markets," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(4), pages 803-833, November.
    • Handle: RePEc:spr:weltar:v:156:y:2020:i:4:d:10.1007_s10290-020-00381-3
    DOI: 10.1007/s10290-020-00381-3
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    References listed on IDEAS

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    More about this item

    Keywords

    Stock returns; Event study; Trade policy; China;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • G1 - Financial Economics - - General Financial Markets
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy

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