Interference of macroeconomy in the performance of stock markets in Latin America and Asia

Abstract

This research aims to investigate the effects of macroeconomic variables on stock market performance in Latin America and Asia. To achieve this objective, we considered data from 2000 to 2018 from nine countries located in Latin America and Asia, namely Brazil, Chile, China, India, Japan, Malaysia, Mexico, Peru, and Russia. The independent variables used in the work to determine the macroeconomic effects on the financial market were ec onomic freedom D(Ln(EF)), unemployment rate D(UNE), gross domestic product D(%ΔGDP) and exchange rate D(ER). We used the score of the local stock exchange D(SE) as a proxy for performance and as a dependent variable. Subsequently, multiple panel data regression was performed. The results show that all variables are significant at 10%. D(Ln(EF)) and D(ER) show a negative relation with D(SE), and D(UNE) and D(%ΔGDP) show a positive relation with D(SE). Important macroeconomic results with company performance.

Keywords

• Panel Data
• Performance
• Stock Market
• Newey-West
• Macroeconomic variables