Research On The Impact Of International Trade Conflict On Stock Market

Since China's reform and opening up,China's economic development rate has been at the forefront of the world and the volume of foreign trade exports has maintained rapid growth.With the increasing frequency of trade,the number of trade frictions has also increased year by year.The United States is the country that initiated the most trade investigations in China.With developing,China's economic strength has been greatly improved.By 2018,China's GDP ranked second in the world,with a growth rate of 6.6%,ranking second only to the United States.China's GDP contribution to the world economy is as high as 30%.The rapid development of China's economy threatens the status of the United States as the world's sole superpower.In order to curb China's development momentum,the United States has repeatedly provoked disputes in its trade with China.On June 15,2018,the United States announced a list of goods levied on China's $50 billion.China immediately responded with a counter-attack,announcing the beginning of the Sino-US trade war.This paper reviews relevant literature on the impact of international emergencies and macroeconomic factors on the stock market and the effects of excessive or insufficient investor response.Based on the theoretical basis of effective market theory,behavioral finance theory and corporate heterogeneity,this paper studies the impact of international trade conflicts on China's stock market by using various research methods such as event research and multiple linear regression.The main content of this paper consists of six parts: The first part is the introduction,which mainly introduces the background and research significance of the paper,describes the writing ideas and research framework,and explains the research methods,innovations and deficiencies of the article;The second part is a literature review,which mainly introduces the literature in three aspects.The first is to introduce domestic and foreign scholars on the relevant research on the stock market in the international emergency.The second is to sort out the relevant literature on the impact of macroeconomic factors on the stock market and the third is to introduce the literature on behavioral finance in response to excessive or insufficient investors.The third part is the theoretical basis,introducing the theory of effective market,behavioral finance and enterprise heterogeneity and combs the logical relationship between the theory and the research content of this paper.The fourth part is research design.This part introduces the hypothesis,variable definition,sample selection and model construction of the article mainly use event research method and multiple linear regression model.The fifth part is empirical analysis.It uses event research method and multiple linear regression method to study the impact of international trade conflict on stock market.The sixth part is the research conclusion and suggestion.According to the research results of the fifth part,combined with the actual situation in China.Make relevant policy recommendations.The empirical research results show that:(1)International trade conflicts will have a huge impact on the stock market in the short term;(2)International trade conflicts have different impacts on different sectors of the stock market,and have a greater impact on Shanghai and Shenzhen A-shares and longer time;(3)International trade conflicts have different impacts on different industries and have greater impact on related industries.(4)The degree of influence of international trade conflicts on state-owned enterprises and non-state-owned enterprises is inconsistent;(5)institutional investors play a role in stabilizing the market in the face of international trade conflicts;Investors will have an early reaction and overreaction in the face of international trade emergencies.There are two points in the innovation of the article: First of all,the current academic community lacks literature on international trade conflicts for stock market research.China's existing research on the impact on the stock market is mainly focused on the impact of natural events such as the Wenchuan earthquake and bird flu on the stock market or the impact of a domestic policy event on the stock price fluctuations of the corresponding companies.No research on the impact of events such as international trade conflicts that directly affect the import and export trade between countries on the stock market;Secondly,the current research on the stock market in the international emergency is mainly to study the validity of information,to study whether an emergency has information content,whether the market responds to the information.Fewer studies will divide the sample into several sub-samples for testing.In this study,the sample is further divided into sub-samples of different sectors,different industries,different natures,and different institutional investors.Finally,the event research method and the multiple linear regression method are used in this paper.Five days before and after the Sino-US trade war broke out as the event window,the 150-day to the first 30 days before the outbreak was used as the estimation window to calculate the corresponding average excess return.Rate and cumulative excess return rate,can clearly see the impact of the emergence of international trade conflicts on the stock market.Subsequently,a multivariate regression model was used to test the impact of different days on the market return rate within 5 days before and after the event,and further verify the impact of international trade conflict on the stock market,so that the results are robust.