Study On The Linkage Between Chinese And American Stock Markets

In the context of global economic and trade integration,the increasing trade exchanges between China and foreign countries,the improvement of capital market openness and internationalization level have promoted the linkage between China's stock market and the international capital market.As the leading country in the global capital market,the United States cannot ignore the impact of its securities market fluctuations on other countries.Economies in recent years,scholars for research the stock market correlations between heat rise,found Asian stock market linkage effect exist in developing countries,and found that the correlation between developing countries and developed countries have increased in recent years,for the two largest economies of China and the United States stock market correlation study has practical guiding significance for the country and investors.From the perspective of the linkage transmission mechanism of The Chinese and American stock markets,this paper discusses the changes of the linkage between the Chinese and American stock markets from 2014 to 2019.From the view of three transmission mechanisms,the trade transmission mechanism,the internationalization transmission mechanism of The Chinese stock market and the exchange rate transmission mechanism of the Chinese and American stock markets,this paper studies the changes of the linkage effect of the Chinese and American stock markets.Among them,empirical tests are respectively conducted on the correlation between Chinese and American stock markets before and after the occurrence of two hot events,namely sino-us economic and trade frictions and the inclusion of A-shares in MSCI index,to discuss the change of the linkage effect of Chinese and American stock markets from the perspective of china-us trade transmission mechanism and the internationalization transmission mechanism of Chinese stock markets.On the data selection,has information are selected in sino-us trade mechanism and the Dow Jones U.S.kechuang board index as the representative of the high and new technology industry sector index to test their stock markets high-tech industry sector index correlation,and openness in China's capital market transmission mechanism Angle is choosing the representation of the stock market indexes between the two countries the benchmark Shanghai composite index and the dow Jones industrial average.The DCC-GARCH dynamic correlation coefficient model and Granger causality test were used to calculate the dynamic correlation coefficient and stock market linkage causal relationship between stock index volatility in Chinese and American stock markets respectively.Research conclusions can be summarized as between 2014 and 2019,under the u.s.-china trade conduction mechanism and degree of opening China's capital market transmission mechanism,the change of China's stock market impact on the U.S.stock market change is not big,but the U.S.stock market impact on China,the changing of the openness of China's stock market and the sino-us trade conflict between China and the United States on the linkage of the long-term overall effects bring obvious change.The results show that,on the whole,the correlation between Chinese and American stock markets is not high.Although it may cause some short-term changes in the stock markets after the occurrence of hot events,its impact is limited.On the whole,the correlation between the two stock markets before the occurrence of hot events is lower than after the occurrence of hot events,and the American stock market will have an impact on The Chinese stock market after the occurrence of hot events.The reason lies in the differences in the degree of development,trading system and regulatory system of the Chinese and American stock markets,which leads to the low correlation between the two countries' stock markets,while the relatively mature investment system and the enthusiasm of foreign investment in the United States lead to the impact of the American stock market on the Chinese stock market,and vice versa.The innovation of this paper is that many previous studies on the linkage effect between China and the United States often ignore the theoretical analysis and discussion on the transmission mechanism of the linkage effect of the stock market.After discussing the basic transmission mechanism theory of the linkage of the stock market,this paper discusses in more detail the linkage mechanism between China and other stock markets as well as the Stock market of the United States.In empirical research of stock market linkage effect between the two countries carried out,a lot of literature is basic to economy development level or regional Angle,Angle of a financial crisis or event time hot point as well as a policy mechanism or Angle were discussed,and in this article,through the perspective of different transmission mechanism,combined with hot issues point linkage effect of stock market of China and the United States theoretical and empirical analysis.Finally,countermeasures and Suggestions are put forward for the improvement of China's capital market system and the steady opening of the capital market,which are as follows: using intelligent digital technology and other high-tech tools to assist supervision and implementing market debt-to-equity swaps to reduce financial leverage;The establishment of RMB cross-border backflow mechanism to improve the degree of RMB internationalization and diversify the risk of usd settlement exchange rate;the establishment of mutual funds,life insurance financial products and other investment systems to achieve the purpose of "retail";we will relax the restrictions on foreign investment in payment institutions and the threshold for foreign investment in China's securities market to provide more effective and fair market access.