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Macroeconomics and Its Impact on Stock Markets of India, China, and Japan: ASIAN Markets

Macroeconomics and Its Impact on Stock Markets of India, China, and Japan: ASIAN Markets

Amith Vikram Megaravalli
Copyright: © 2023 |Pages: 18
ISBN13: 9781668474600|ISBN10: 1668474603|EISBN13: 9781668474617
DOI: 10.4018/978-1-6684-7460-0.ch053
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MLA

Megaravalli, Amith Vikram. "Macroeconomics and Its Impact on Stock Markets of India, China, and Japan: ASIAN Markets." Research Anthology on Macroeconomics and the Achievement of Global Stability, edited by Information Resources Management Association, IGI Global, 2023, pp. 998-1015. https://doi.org/10.4018/978-1-6684-7460-0.ch053

APA

Megaravalli, A. V. (2023). Macroeconomics and Its Impact on Stock Markets of India, China, and Japan: ASIAN Markets. In I. Management Association (Ed.), Research Anthology on Macroeconomics and the Achievement of Global Stability (pp. 998-1015). IGI Global. https://doi.org/10.4018/978-1-6684-7460-0.ch053

Chicago

Megaravalli, Amith Vikram. "Macroeconomics and Its Impact on Stock Markets of India, China, and Japan: ASIAN Markets." In Research Anthology on Macroeconomics and the Achievement of Global Stability, edited by Information Resources Management Association, 998-1015. Hershey, PA: IGI Global, 2023. https://doi.org/10.4018/978-1-6684-7460-0.ch053

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Abstract

The objective of this chapter is to examine the long-run and the short-run relationship between India, China, and Japanese stock markets and key macroeconomic variables such as exchange rates and inflation (proxied by consumer price index) of ASIAN 3 economies (India, China, and Japan). Monthly time series data spanning the period from 2008 January to November 2016 has been used. The unit root test, the cointegration test, Granger causality test, and pooled mean group estimator have been applied to derive the long-run and short-run statistical dynamics. The findings of pooled estimated results of ASIAN 3 countries show that exchange rate has a positive and significant long-run effect on stock markets while the inflation has a negative and insignificant long-run effect. In the short run, there is no statistically significant relationship between macroeconomic variables and stock markets. This study emphasizes the impact of macroeconomic variables on the stock market performance of a developing economy (India and China) and developed economy (Japan).

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