Research Conductivity Of The Financial Markets Based On Causality

The rapid development of the global economy, which is not only a opportunity for China's economic but also a challenge for it, benefits and risks are exited at one time. It is extremely important for us how to benefit and to avoid risks at the same time, if you want to avoid the risk of events, to know what is necessary will lead to the risk becomes proactive key for as soon as possible to prevent such incidents, the stock market's in decline Period, especially in the extreme down period, the conductivity becomes complex and intense, some financial markets which had no relationship or a weak conductivity between them will become had conductive relationship, and these relationships are the carrier of financial market crisis, as the economic contacts between the financial markets, making the risk of rapid spread of the financial markets, and in the scope and extent, it will be strengthened, This shows that the conductivity between financial markets is the key to avoid the risk, which explains the important of the researching conductivity among financial markets. Conductivity between financial markets will lead to the risk of transmission, and may even cause a large-scale economic crisis,1992-1993 crisis in the European financial and monetary system, the 1997 Asian financial crisis, the Russian economic crisis of 1998 and the 2007 outbreak of the U.S. subprime mortgage crisis are typical examples. However, the 1997 Asian financial crisis, the Chinese economy is no more influence, why? The reason is that the conductivity of China's financial markets and other countries' is weak or nearly non-existent in 1997, but with China's accession to WTO and Chinese economy continued to deepen for the internationalization of the economy, China's financial market "islands" which formed before will cease to exist, then the blessing of his role will disappear, therefore, we should be more concerned about China's financial market itself or with other financial markets relationship between the conduction, so that China's financial markets to ensure a smooth healthy development of the "vaccination", which make China's financial market to be invincible in the rapidly changing global economy today and the future.This paper not only by the use of BVAR econometric model of Granger causality between stock markets Shanghai, Shenzhen and Singapore stock markets and Chinese and foreign financial markets in emerging and mature financial markets and the stock price based on very poor conductivity, but also by the impulse response function to further verify the causal relationship conclusion; But also empirical analysis of the changes of the conductive features process between up and down which between the Shanghai, Shenzhen and Singapore stock markets, as well as between Chinese and foreign stock markets as well as between Shanghai, Shenzhen and Hong Kong stock markets. The empirical results show that:for Shanghai, Shenzhen and Singapore stock markets, in the entire sample period, Shanghai and Shenzhen stock mutual conduction, the Singapore stock market and Shenzhen stock mutual conduction, the Singapore stock market on the Shanghai stock market unidirectional conduction; and Singapore stock markets, Shanghai and Shenzhen stock markets conduction in down period than rise period is more complicated; For Chinese and foreign stock markets, in the whole sample period the Hong Kong stock market and Singapore stock market with each other conduction, Japan stock market and South Korea stock market mutual conduction, the U.S. stock market one-way transfer to other markets, Shanghai stock market One-way transfer the South Korea stock market and Shanghai stock market on one-way transmission of Singapore stock market and Shanghai stock market one-way transmission of Hong Kong stock market; the conductivity relationship of the six stock markets in down period more complex than rise, and the application of the impulse response function to verify the conclusions of the Granger causality; for the Shanghai, Shenzhen stock markets and the Hong Kong stock market,in the period of the entire sample period and rise period the Shenzhen stock market are one-way transfer of Hong Kong stock market, during the down period Shenzhen stock market to shanghai and Hong Kong stock markets are One-way transmission, which can also be seen that the conductivity during the down period is more complex than rise period.