Volume 28 Number 2 September 2003 Equity Transmission Mechanisms from Asia to Australia: Interdependence or Contagion? Mardi Dungey, Renee Fry and Vance L. Martin Abstract The linkages between daily Asian and Australian equity market returns over the period 1995-2001 are investigated within the framework of a latent factor model. Transmission mechanisms arising from both market interdependence and contagion are studied. The empirical results reveal that co-movements in Asian and Australian equity markets are largely determined by interdependent linkages arising from common systemic factors. There is little significant evidence of contagion, although negative shocks have more effect than positive ones. Download this article. Keywords CONTAGION; INTERDEPENDENCE; FINANCIAL CRISES; FACTOR MODELS; INDIRECT ESTIMATION. Contact Details Mardi Dungey Research School of Pacific and Asian Studies Australian National University Canberra ACT 0200 E-mail: Mardi.Dungey@anu.edu.au Renee Fry Research School of Pacific and Asian Studies Australian National University Canberra ACT 0200 E-mail: Renee.Fry@anu.edu.au Vance L. Martin Department of Economics The University of Melbourne Parkville VIC 3052 E-mail: vance@unimelb.edu.au This page was last updated in February, 2004. Copyright © The Australian Graduate School of Management Phone: +61 2 9931 9200; Email: eajm@agsm.unsw.edu.au