The way digitalization is impacting international financial markets: Stock price synchronicity

This paper investigates whether and how the development level of a country's digital economy affects stock price synchronicity. The results indicate that countries with high levels of digital economy development exhibit low stock price synchronicity. Additionally, by decomposing stock price syn...

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Published in:International finance (Oxford, England) England), 2022, Vol.25 (3), p.396-415
Main Authors: Chen, Chen, Moeini Gharagozloo, M. Mahdi, Darougar, Layla, Shi, Lei
Format: Article
Language:English
Subjects:
capital market
digitalization
Digitization
stock price informativeness
stock price synchronicity
Stock prices
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description This paper investigates whether and how the development level of a country's digital economy affects stock price synchronicity. The results indicate that countries with high levels of digital economy development exhibit low stock price synchronicity. Additionally, by decomposing stock price synchronicity into systematic and firm‐specific stock return variations, we find that systematic (firm‐specific) variations of stock returns decrease (increase) with the level of a country's digitalization. These findings shed light on the future trend of stock price synchronicity in financial markets around the world and support the information‐based interpretation of stock price synchronicity.
doi_str_mv 10.1111/infi.12416
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source EconLit s plnými texty; Wiley-Blackwell Read & Publish Collection; Business Source Ultimate (EBSCOHost)
subjects capital market
digitalization
Digitization
stock price informativeness
stock price synchronicity
Stock prices
title The way digitalization is impacting international financial markets: Stock price synchronicity
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