The Analysis For The Influencing Factors Of The Financial Crisis Contagion Based On Structural Equation Model

The outbreak of the subprime crisis in the United States in2007had not onlycaused huge losses to the domestic, but also spread these negative effects to othercountries after what came next the global financial tsunami."Contagion" hascaused widespread community concern and attention as a special interestingtopics and important subject for many scholars and relating to the policyauthority to regulate the national economy and financial market efficiency.However, which factors lead to the spreading of the financial crisis to China’sfinancial system. This thesis builds up the structural equation model to researchthe influencing factors basing on the2007-2011Sino-US indicators data. Thus wecan more precisely and clearly describe the financial contagion mechanisms andconstraints specific performance relationship with not only in-depth analysis ofthe financial crisis conduction path, improving the financial crisis early warningmechanism, effectively preventing further deterioration of the crisis bycontrolling certain variables, and more importantly providing some reference forour macroeconomic policies and a sound market system by identifying the factorsaffecting the strength.This thesis arranges four chapters. The first chapter is an introduction partwhich summarizes the research background, research contents, ideas, etc. Thesecond chapter is the impact of the financial crisis contagion which proposes tobuild structural equation model of financial contagion main variables. The thirdchapter builds the financial crisis contagion effect relationship model basing onthe financial crisis influencing factors and infection path and then selects arepresentative index system to construct contagion effect conceptual model of thebasic framework according to the availability of data and research need. Thefourth chapter is the contagion effect factors empirical research which selects theU.S. subprime mortgage crisis on China’s influence as an object of empiricalresearch. Basing on the path choice of the financial crisis contagion, we can take appropriate fiscal and monetary policies to control the financial contagion riskbrought about by the global financial crisis in a safe range by monitoring thefinancial crisis in biological systems.The results show these below on the basis of comprehensive analysis of thefinancial crisis effects model, the model of contagion effect of the financial crisisand the macro-control effects model. The financial crisis contagion has spreadingeffect, net transmission effect, immunization effect and parasitism effect. TheStock price-earnings ratio and the degree of dependence on foreign trade are themain influencing factors of the financial crisis’ spreading among countries. Thehigh inflation of the stock price-earnings ratio and the non-performing loans raterising are the main shocks on the evolution of the financial crisis impact. Underthe background of the global financial environment going down, the coordinatingof the interest rate policy and the fiscal spending policies can effectively preventand inhibit the process of financial system further deterioration and beinginfected. Tightening interest rate policy can play in advance to effectively preventthe outbreak of the financial crisis when the country’s financial environment istoo high. When the international financial environment gradually deteriorates,expansionary fiscal spending policy can later effectively control and defusefinancial crisis contagion.