A Study On The Linkage Relationship Between Stock Markets Within The BRICS Countries And Major Developed Countries

Since the 21 st century,under the influence of economic and financial globalization,BRICS countries entered a stage of rapid development.Especially after the US subprime crisis,BRICS countries become the main engine of global economic growth and the main growth point of economic development.For a long time,the BRICS countries have maintained good economic cooperation relations,and the economic and trade links between them are very close.The degree of development of foreign trade and investment will affect the interconnection of national capital markets.Stock market linkage is based on economic cooperation among countries.With the increasing economic strength and financial strength of BRICS countries,the linkage between BRICS stock markets has become more and more noticeable.This paper takes the BRICS stock market as the research object.Firstly,the causes of stock market linkage are analyzed from two aspects.On the one hand,it is analyzed from the perspective of economic fundamentals,including macroeconomic,financial cooperation and trade and investment.On the other hand,it is analyzed from the perspective of the stock market itself,including the degree of stock market openness and the impact of capital activities in the stock market on stock market linkage.Then the daily closing price from 2000 to 2017 is selected to use VAR model and DCC-GARCH model to comprehensively analyze the static and dynamic correlation between BRICS stock markets.Taking BRICS as the representative of emerging markets,the linkage between developed countries and emerging market stock markets is analyzed.Through the analysis of the BRICS member countries can know different static and dynamic correlation between the stock market.Among them,the Brazilian stock market has the greatest impact on other stock markets,and the Russian stock market is the most affected.In the analysis of the linkage between developed countries and BRICS stock markets,the linkage between China and the developed countries' stock markets is the strongest,while in developed countries,the United States and the BRICS are more strongly linked.In view of the research conclusion,this paper puts forward suggestions fromtwo aspects.In terms of the development of the stock market itself,it is necessary to strengthen the monitoring of the abnormal movements of the international stock market and improve the open system of the stock market.In a macroeconomic perspective,we should deepen economic and trade cooperation among BRICS countries,and strict the regulation of international capital flows.