The Effect of Economic Policy Uncertainty in the United States on Stock Market Performance of the Asian Tiger Economies

Posted: 26 Jun 2012  

Vichet Sum

University of Maryland Eastern Shore - School of Business and Technology

Date Written: June 25, 2012

Abstract

This study examines the impact of the changes in economic policy uncertainty in the United States on the stock markets of the Asian Tiger economies (Hong Kong, Singapore, South Korea, and Taiwan) because trades between Asian Tiger economies and the US have increased significantly in recent years. Using data of monthly changes in economic policy uncertainty in the US and monthly returns on the major indices of Asian Tiger economies from 1985:2 to 2012:5, this paper shows that changes in economic policy uncertainty in the US negatively affect the returns on the stock market indices of the Asian Tiger economies. The results also indicate that changes in economic policy uncertainty in the US negatively affect returns on the equal-weighted portfolio of the stock market indices of Asian Tiger economies. The finding suggests that stock market performance of the Asian Tiger economies is linked to the economic policy conditions in the US. The finding implies that market participants in the Asian Tiger economies do pay attention to the economic policy conditions in the US.

Keywords: economic policy uncertainty, stock market performance, USA, Tiger economies

JEL Classification: E60, G12, G14

Suggested Citation

Sum, Vichet, The Effect of Economic Policy Uncertainty in the United States on Stock Market Performance of the Asian Tiger Economies (June 25, 2012). Available at SSRN: https://ssrn.com/abstract=2092097

Vichet Sum (Contact Author)

University of Maryland Eastern Shore - School of Business and Technology ( email )

2105 Kiah Hall
Princess Anne, MD 21853
United States
410-651-6531 (Phone)
410-651-6529 (Fax)

HOME PAGE: http://www.umes.edu/bma/Sum.html

Paper statistics

Abstract Views
381