Staff View: Ripple effect of trump’s tariff on the stock market spill over in six Asian countries

Ripple effect of trump’s tariff on the stock market spill over in six Asian countries

Trade war happened when a nation imposed tariffs or limits the quotas on imports and another foreign country react with similar forms of trade to protect its own benefit. Most countries would impose tariff as their useful tools to control the trade deficit. In 2018, United States started a trade war...

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Main Authors:	Chang, Ling, Goh, Dickson, Ho, Chun Loong, Liau, Jia Hui, Puah, Yen Rou
Format:	Final Year Project / Dissertation / Thesis
Published:	2020
Subjects:	HG Finance
Online Access:	http://eprints.utar.edu.my/3985/1/fyp_FE_2020_CL_%2D_1605770.pdf http://eprints.utar.edu.my/3985/
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spelling	my-utar-eprints.39852021-03-08T10:59:48Z Ripple effect of trump’s tariff on the stock market spill over in six Asian countries Chang, Ling Goh, Dickson Ho, Chun Loong Liau, Jia Hui Puah, Yen Rou HG Finance Trade war happened when a nation imposed tariffs or limits the quotas on imports and another foreign country react with similar forms of trade to protect its own benefit. Most countries would impose tariff as their useful tools to control the trade deficit. In 2018, United States started a trade war with China with the reason to reduce the 621 billion US trade deficit. In our study, we are going to examine the trade war happened between United States and China that could possibilities affect the Asia countries’ stock market return. Throughout the past studies, most researchers focus on the impact of both US and China trade war by looking at the economic factors such as GDP, inflation and unemployment rate. Thus, we aim to focus on the trade pattern that could probably affect the stock market return and also spillover effect towards country. The reason that we narrow from economic factors to stock market is because it can be easy capture the spillover effect and stock market are more sensitive on news. We are using different test such as Panel Least Square, Autoregressive Conditional Heteroscedasticity (ARCH), Generalized Autoregressive Conditional Heteroscedasticity (GARCH) and Exponential Generalized Autoregressive Conditional Heteroscedasticity (EGARCH) models to determine the spillover effect of the trade war on six countries which is Taiwan, Malaysia, Singapore, Japan, South Korea and Hong Kong. The period that we investigate starting from 22 Jan 2018 to 1 June 2019 total of eight scenario situation that US impose tariff and China retaliate. In the overall result, we conclude that Taiwan and Hong Kong are the biggest winner in this trade war. Both of the country gets positive impact more than negative impact in stock market while at the same time, Japan, South Korea, Taiwan and Malaysia react more on unexpected negative news. While as an overview, US and China move on to negotiation in order to lower down the loss for both and other countries. In trade world, many countries are connected globally and it is important that both countries have to step forward to solve the trade conflict. 2020-04-15 Final Year Project / Dissertation / Thesis NonPeerReviewed application/pdf http://eprints.utar.edu.my/3985/1/fyp_FE_2020_CL_%2D_1605770.pdf Chang, Ling and Goh, Dickson and Ho, Chun Loong and Liau, Jia Hui and Puah, Yen Rou (2020) Ripple effect of trump’s tariff on the stock market spill over in six Asian countries. Final Year Project, UTAR. http://eprints.utar.edu.my/3985/
institution	Universiti Tunku Abdul Rahman
building	UTAR Library
collection	Institutional Repository
continent	Asia
country	Malaysia
content_provider	Universiti Tunku Abdul Rahman
content_source	UTAR Institutional Repository
url_provider	http://eprints.utar.edu.my
topic	HG Finance
spellingShingle	HG Finance Chang, Ling Goh, Dickson Ho, Chun Loong Liau, Jia Hui Puah, Yen Rou Ripple effect of trump’s tariff on the stock market spill over in six Asian countries
description	Trade war happened when a nation imposed tariffs or limits the quotas on imports and another foreign country react with similar forms of trade to protect its own benefit. Most countries would impose tariff as their useful tools to control the trade deficit. In 2018, United States started a trade war with China with the reason to reduce the 621 billion US trade deficit. In our study, we are going to examine the trade war happened between United States and China that could possibilities affect the Asia countries’ stock market return. Throughout the past studies, most researchers focus on the impact of both US and China trade war by looking at the economic factors such as GDP, inflation and unemployment rate. Thus, we aim to focus on the trade pattern that could probably affect the stock market return and also spillover effect towards country. The reason that we narrow from economic factors to stock market is because it can be easy capture the spillover effect and stock market are more sensitive on news. We are using different test such as Panel Least Square, Autoregressive Conditional Heteroscedasticity (ARCH), Generalized Autoregressive Conditional Heteroscedasticity (GARCH) and Exponential Generalized Autoregressive Conditional Heteroscedasticity (EGARCH) models to determine the spillover effect of the trade war on six countries which is Taiwan, Malaysia, Singapore, Japan, South Korea and Hong Kong. The period that we investigate starting from 22 Jan 2018 to 1 June 2019 total of eight scenario situation that US impose tariff and China retaliate. In the overall result, we conclude that Taiwan and Hong Kong are the biggest winner in this trade war. Both of the country gets positive impact more than negative impact in stock market while at the same time, Japan, South Korea, Taiwan and Malaysia react more on unexpected negative news. While as an overview, US and China move on to negotiation in order to lower down the loss for both and other countries. In trade world, many countries are connected globally and it is important that both countries have to step forward to solve the trade conflict.
format	Final Year Project / Dissertation / Thesis
author	Chang, Ling Goh, Dickson Ho, Chun Loong Liau, Jia Hui Puah, Yen Rou
author_facet	Chang, Ling Goh, Dickson Ho, Chun Loong Liau, Jia Hui Puah, Yen Rou
author_sort	Chang, Ling
title	Ripple effect of trump’s tariff on the stock market spill over in six Asian countries
title_short	Ripple effect of trump’s tariff on the stock market spill over in six Asian countries
title_full	Ripple effect of trump’s tariff on the stock market spill over in six Asian countries
title_fullStr	Ripple effect of trump’s tariff on the stock market spill over in six Asian countries
title_full_unstemmed	Ripple effect of trump’s tariff on the stock market spill over in six Asian countries
title_sort	ripple effect of trump’s tariff on the stock market spill over in six asian countries
publishDate	2020
url	http://eprints.utar.edu.my/3985/1/fyp_FE_2020_CL_%2D_1605770.pdf http://eprints.utar.edu.my/3985/
_version_	1695535845477449728
score	13.211869

Ripple effect of trump’s tariff on the stock market spill over in six Asian countries

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