International Financial Contagion: The Role of the UK

Abstract

The purpose of this study is to consider the role of the United Kingdom in the effect of transferring the global credit crisis from the United States to Turkey. This study compares the results of the most commonly used contagion models, which are known as Forbes and Rigobon model and Dungey, Fry, Gonzalez-Hermosillo and Martin model. Moreover, this study presents evidence regarding the manner of transmission of the crisis. This study confirmed that there is a strong contagion effect from the United States to Turkey and the United Kingdom. The importance of the United Kingdom in transferring this shock is captured in the DFGM model more accurately than in the FR model. Finally, the global credit crisis is transferred to Turkey through financial linkages rather than trade linkages. The existence and direction of contagion create an opportunity for investors to use international hedging strategies and asset allocation.

The Relationship Between Corporate Tax Rate and Economic Growth During the Global Financial Crisis: Evidence from a Panel VAR

“…al, 1998;Favero and Giavazzi, 2002;Dungey, 2009). Following the existing literature, the crisis period is defined from 2007 to 2008 based on a news-based framework (Dungey, 2014;NBER 2010;Yalama, 2012). The precrisis period ranges from 1998 to 2006, the crisis period ranges from 2007 to 2008, and the post-crisis period ranges from 2009 to 2016.…”

“…These studies also focus on the relationship between different types of taxation and economic growth. Some of them focus on personal income tax (Pecerino, 1994;Gober and Burns, 1997;Wildmalm, 2001), while some other focus on sales tax or property tax (Gober and Burns, 1997;Ojede and Yamarik;2012;Stoilova, 2017). Also, there are studies investigating the relationship between corporate tax rates and economic growth (Lee and Gordon, 2005;Dackehag and Hansson, 2012;Adkisson and Mohammed, 2014).…”