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Dynamics of Stock Prices and Market Efficiency

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  • Antônio André Cunha Callado
  • Carla Renata Silva Leitão

Abstract

Over the last few decades, academic research on market efficiency has taken a leading position in the field of financial theories. The objective of this paper is to present contradictions within the evidence about market efficiency and discuss efficiency measurement as an emerging approach. The paper presents the evolution of research and also the lack of convergence between evidence provided by the literature and the lack of consistent arguments for explaining them. The paper also presents a framework that illustrates intermediate levels of efficiency and the first approach designed to measuring market efficiency. Finally the paper points out that divergences amongst the empirical evidence found in the literature should be considered as a key issue and further efforts should focus on specific conceptual elements inherent to its operationalization. Therefore, econometric models should not be given the exclusive responsibility of explaining market efficiency, nor possibility of incorporating alternative epistemological perspectives into the efficient / inefficient duality should be kept outside.

Suggested Citation

  • Antônio André Cunha Callado & Carla Renata Silva Leitão, 2018. "Dynamics of Stock Prices and Market Efficiency," International Business Research, Canadian Center of Science and Education, vol. 11(6), pages 29-40, June.
    • Handle: RePEc:ibn:ibrjnl:v:11:y:2018:i:6:p:29-40
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    References listed on IDEAS

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    More about this item

    Keywords

    market efficiency; partial efficiency; measurement of efficiency;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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