Non-Financial Markets and Interconnectedness between US and Emerging Financial Economies: Evidence from Covid-19 Financial Crisis


  • Ayesha Sarwat International Islamic University Islamabad, Pakistan Author
  • Dr. Hameeda Akhtar International Islamic University Islamabad, Pakistan Author



financial contagion, emerging financial markets, financial econometrics, macroeconomic global risk factors


During times of financial turmoil, when traditional assets experience significant volatility, commodity markets provide diversification benefits to investors. The objective is to investigate the factors influencing financial contagion between the United States and emerging Asian equity markets (China and India). The study analyzes the influential impact of the volatility index, gold, oil, and USD index on financial contagion among the markets. The dynamic conditional correlation analysis is utilized to explore the correlations during the US subprime and Covid-19 crises, and quantile regression analysis is conducted at different levels of time-varying correlations. The study's results suggest that financial contagion becomes more pronounced during periods of financial turmoil, and global financial crises contribute to alterations in the dependence structure between financial contagion among equity markets and global macroeconomic risk factors. The effect of financial contagion can be abridged through altering portfolio reallocation strategies according to investors’ risk appetite during high market volatility.

Author Biographies

  • Ayesha Sarwat, International Islamic University Islamabad, Pakistan

    Author, Ayesha Sarwat is affiliated with International Islamic University Islamabad, Pakistan. She is perusing her Ph.D. specialization in Finance degree from the same institute. She is serving department of Business Administration, faculty of Management Sciences at Virtual University of Pakistan. The goal of the author is to excel in investment analysis and portfolio management and explore more strategies that would be helpful for investors globally.

  • Dr. Hameeda Akhtar, International Islamic University Islamabad, Pakistan

    Author, Dr. Hameeda Akhtar is affiliated with International Islamic University Islamabad. She has completed her Ph.D. Finance from University of Science and Technology Beijing (USTB), China. She has done post doctorate in Business Administration from University of Science and Technology Beijing (USTB), China. She is serving department of Business Administration, faculty of Management Sciences at International Islamic University Islamabad, Pakistan. Her research interests are capital structure, corporate governance, corporate restructuring, corporate social responsibility and financial crisis. She has awarded with Excellent International Student Award by Ministry of Education China in 2013, 2014 and 2016.


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How to Cite

Sarwat, A., & Akhtar, H. (2023). Non-Financial Markets and Interconnectedness between US and Emerging Financial Economies: Evidence from Covid-19 Financial Crisis. Bulletin of Business and Economics (BBE), 12(4), 238-253.

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