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On the Dynamic Changes in the Global Stock Markets’ Network during the Russia–Ukraine War

Author

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  • Kashif Zaheer

    (Office of Research Innovation Comercialization (ORIC), Rawalpindi Medical University (OTB), Tipu Road, Rawalpindi 46000, Pakistan
    Department of Management Sciences, COMSATS University, Park Road, Islamabad 45550, Pakistan)

  • Faheem Aslam

    (Department of Management Sciences, COMSATS University, Park Road, Islamabad 45550, Pakistan
    School of Business Administration (SBA), Al Akhawayn University, Ifrane 53000, Morocco)

  • Yasir Tariq Mohmand

    (Department of Management Sciences, COMSATS University, Park Road, Islamabad 45550, Pakistan)

  • Paulo Ferreira

    (VALORIZA—Research Center for Endogenous Resource Valorization, 7300-555 Portalegre, Portugal
    Department of Economic Sciences and Organizations, Polytechnic Institute of Portalegre, 7300-555 Portalegre, Portugal
    CEFAGE-UE, IIFA, Universidade de Évora, Largo dos 2 Colegiais, 7000-809 Évora, Portugal)

Abstract

Analysis of the relationships among global stock markets is crucial for international investors, regulators, and policymakers, particularly during a crisis. Complex network theory was applied to analyze the relationship between global stock markets during the Russia–Ukraine war. Daily data from 55 stock markets from 6 August 2021 to 23 September 2023 were retrieved and used to investigate the changes in global stock market networks. The sample period was divided into 22 subsamples, using a 100-day rolling window rolled forward a trading month, and then long-range correlations based on distance matrices were calculated. These distance matrices were utilized to construct stock market networks. Moreover, minimum spanning trees (MSTs) were extracted from these financial networks for analytical purposes. Based on topological and structural analysis, we identified important/central nodes, distinct communities, vulnerable/stable nodes, and changes thereof with the escalation of war. The empirical findings reveal that the Russia–Ukraine war impacted the global stock markets’ network. However, its intensity varied with changes in the region and the passage of time due to the level of stock market integration and stage of war escalation, respectively. Stock markets of France, Germany, Canada, and Austria remained the most centrally connected within communities; surprisingly, the USA’s stock market is not on this list.

Suggested Citation

  • Kashif Zaheer & Faheem Aslam & Yasir Tariq Mohmand & Paulo Ferreira, 2024. "On the Dynamic Changes in the Global Stock Markets’ Network during the Russia–Ukraine War," Economies, MDPI, vol. 12(2), pages 1-27, February.
    • Handle: RePEc:gam:jecomi:v:12:y:2024:i:2:p:41-:d:1332839
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    References listed on IDEAS

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