US financial crisis impact on Asian economies : does “decoupling” theory hold : the case of Singapore, Thailand and Vietnam

摘要

Until recently, many investors believed in decoupling theory which says that emerging countries can be resilient from the weakening of US economy and keep stable growths. In 2007, international investors observed a rise on stock markets of some emerging countries when stock price on developed markets in the US or the UK dropped dramatically. Meanwhile, they also observed prosperous economic growth in these emerging markets. This trend supported decoupling theory’s proponents who argue that when emerging stock markets move against a slump on developed markets as US or UK, the economy of these countries will also grow healthily.Since this argument is on discussion, the paper plans to find out a plausible answer for the question: if decoupling theory holds for stock market of emerging countries, will it also hold for their economies. The paper made data research on US market in relation with three other export-dependent Asian markets – Singapore, Thailand and Vietnam and will discuss two problems: (1) how is co-movement of Asian and the US stock markets from 2007 to 2009, and (2) how the economy of these markets responds in the according year. The paper expects to find that stock markets in emerging Asian countries are decoupled from US stock market and their economies also move independently.Data showed that in 2007, there was decoupling effect between Singapore, Thailand and the US. However, from October 2008 until March 2009, stock markets of these countries tracked the movement of US market quite closely. At the same time, their macro economic indicators were on downward trend. In these Southeast Asian countries, decoupling theory just holds for a short period when world economy is in good condition and we could not find certain sign whether it will hold again in the future.