A Comparative Study On The Stock Market Linkage Between China And Other Brics Countries And Major Developed Countries

In the early 21 st century,the concept of brics was first proposed.Due to geographical location,rapid development of emerging markets and other factors,the economies,finance and trade of brics countries are increasingly linked together,and this trend has become more and more obvious in recent years.Specifically reflected in the stock market,in the current vigorously advocating financial liberalization,China and other brics countries in the stock market whether there is linkage? If so,what is the trend of this linkage? For the major developed countries(the United States,the United Kingdom,Japan,Germany,Australia,etc.),their stock markets have a relatively long period of development compared with that of China.What is the relative strength of the stock market in major developed countries and other brics countries?This paper starts with the research on the correlation between China's stock markets and those of other bric countries and those of major developed countries,and summarizes the previous achievements.Second,the stock market linkage analysis is made on the theory of related academia,and international economic and trade pathways,capital international cross-border open pathways,the transmission way of the real economy driven,investors expected pathway as the main entry point for China and other bric countries and main developed country stock market linkage way is analyzed.In addition,the correlations in stock market,in the process of the concrete analysis,select an object to study the typical stock index and the researchprocess is divided into three stages in time,the first phase is on May 11,2005 to October 24,2008,the second phase as the solstice 29 October 2008 on November 17,2014,the third stage of November 18,2014 to June 1,2019,and further clarified the stock index fluctuation during the relatively severe,Chinese stock market linkages with the brics and other major developed countries what is the difference? Finally,carries on the description statistical analysis,unconditional correlation coefficient analysis,stationarity inspection,autocorrelation and ARCH effect,and the use of GARCH BEKK models and Wald test research on the three stages of China's stock market linkages with the brics and other major developed countries for empirical research,and the empirical results,the research conclusion and put forward the corresponding policy recommendations.The empirical analysis results show that,on the whole,the correlation between the stock markets of China and other brics countries is relatively stronger than that of developed countries.Specifically,during the period of May 11,2005,solstice,24,2008,China and other brics countries were more correlated with the stock markets of major developed countries than with those of other brics countries.This was mainly due to the gradual liberalization of foreign investment restrictions in the stock markets of brics countries,which led to increased foreign investment in the stock markets of brics countries.During the period of October 29,2008 to November 17,2014,China and other brics countries were less correlated than the stock markets of major developed countries,mainly because China was more able to cope with the financial crisis and more resilient after the crisis.Between November 18,2014(solstice)and June 1,2019,China and other brics countries were more correlated with the stock markets of major developed countries than with those of other developed countries,mainly because the geo-economy,which is mainly represented by the stable development of stock markets,was strongly supported under the macro background of China's vigorous promotion of One Belt And One Road.At the sametime,with the stock market becoming more and more an important development and deployment of a country's capital market,the research on stock market linkage should be strengthened to provide relevant reference for policy making for resisting financial risks.In addition,investors can achieve the purpose of hedging risks by making portfolio allocation among the stock markets of countries with weak linkage.