Annexation Stability and Financial Markets

Abstract

Throughout the course of history, annexation has littered the international scene as major powers exert their force in the takeover of smaller lands. Sometimes these takeovers are violent and others are not, but what we undoubtably see is that annexation will be successful if economic indicators rise, post-acquisition. We will focus our attention to three prominent cases of annexation by major powers: Crimea, Kashmir and Hong Kong. We will briefly examine what our study suggests for Ukraine and Taiwan. Our first aim will be to arrive at a developed scenario analysis that identifies actions taken by governments to harmonize territorial integrity. The second aim is to identify the consequences of annexation from a financial pers. Results of this study suggest that financial conditions within the contested areas are an indicator of political stability and successful annexation. Regardless of external pressure from the international community, successful annexation can be achieved. Findings indicate that as overall GDPPC rises and property values rise, the contested area has support from local constituencies for annexation by the major power.