The Global Financial Crisis and Its Impact on Stock Markets: A Systematic Literature Review for Future Research Pathways


  • Ruwangi Mahanamahewa University of Sri Jayewardenepura, Nugegoda, Sri Lanka
  • Wasantha Perera University of Sri Jayewardenepura, Nugegoda, Sri Lanka



The Global Financial Crisis (GFC) which was initiated in the USA is considered the worst recession that collapsed the U.S. stock market. Moreover, the 2008 GFC acts as a textbook example where financial professionals may adopt the consequences and lessons learned during the crisis to effectively manage the future crisis incidences. Thus, this paper reviews the existing literature on the GFC and its impact on stock markets, to identify meaningful gaps in current knowledge, thereby uncovering future research pathways. This study employs a systematic literature review (SLR) methodology to review 100 articles selected from refereed journals from 2008 to 2020, followed by a content analysis. According to content analysis, the findings of this study are based on four themes; causes of the GFC, early warning indicators of the GFC, impact of the GFC on stock markets and the reforms after the GFC. The findings reveal that the main causes of the GFC was the US housing bubble burst and the credit crunch and highlights that the first signs of the GFC was indicated through changes to international reserves and exchange rates of the US during the period 2007 to 2008. Furthermore, literature provides mixed results on the impact of the GFC on emerging Asian stock markets, especially in China. Moreover, the most significant reform established after the crisis was regulating the financial system to improve the investor confidence. This paper will provide various emerging trends, consequences and lessons learned during the crisis.  However, this study does not offer an original empirical result. To the best of the authors’ knowledge, this is the first paper that includes a SLR and a detailed content analysis of the GFC literature covering the period of 2008-2020. Therefore, the findings of this paper can be utilised by researchers, investors, policymakers, and finance professionals to identify the new direction and improve their investment decisions.

Keywords: Global Financial Crisis, Stock Market, Systematic Literature Review