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The Puzzle of the Harmonious Stock Prices

Author

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  • Randall Morck
  • Bernard Yeung

Abstract

A peculiar pattern is evident across the stock markets of different countries. In emerging markets, such as Peru and China, all the stocks in the country tend to rise and fall together in the course of ordinary trading. But in developed countries, such as Denmark and Canada, stocks move independently. What seems to determine how independently a country’s stock prices move is not the size of its market, the diversification of its economy, the stability of its macroeconomic policy or factors relating to the behaviour of individual firms. Rather, stock prices move more independently in countries that are less corrupt.

Suggested Citation

  • Randall Morck & Bernard Yeung, 2002. "The Puzzle of the Harmonious Stock Prices," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 3(3), pages 105-119, July.
    • Handle: RePEc:wej:wldecn:112
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    File URL: https://www.worldeconomics.com/Journal/Papers/Article.details?ID=112
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    Cited by:

    1. Karolis Andriuškevičius & Dalia Štreimikienė & Irena Alebaitė, 2022. "Convergence between Indicators for Measuring Sustainable Development and M&A Performance in the Energy Sector," Sustainability, MDPI, vol. 14(16), pages 1-23, August.
    2. Swati Ghosh & Ernesto Revilla, 2008. "Enhancing the efficiency of securities markets in East Asia," Macroeconomics and Finance in Emerging Market Economies, Taylor & Francis Journals, vol. 1(2), pages 249-268.
    3. Rosella Castellano & Annalisa Ferrari, 2019. "Are stock price dynamics affected by financial analysts recommendations? Evidence from Italian green energy stocks," Quality & Quantity: International Journal of Methodology, Springer, vol. 53(5), pages 2535-2544, September.
    4. James Cordeiro & Lerong He & Martin Conyon & Tara Shaw, 2013. "Informativeness of performance measures and Chinese executive compensation," Asia Pacific Journal of Management, Springer, vol. 30(4), pages 1031-1058, December.

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