Open Access Journal Article

Short-Term Shocks Between Central European Stock Markets: An Approach During The 2020 and 2022 Events

by Rui Manuel Teixeira Dias a,b,* orcid ,  Mariana Chambino a orcid  and  Nicole Rebolo Horta a orcid
a
Accounting and Finance Department, ESCE, Instituto Politécnico de Setúbal, Setúbal, Portugal
b
Center for Studies and Advanced Training in Management and Economics (CEFAGE), University of Évora, Évora, Portugal
*
Author to whom correspondence should be addressed.
JEA  2023, 34; 2(3), 34; https://doi.org/10.58567/jea02030005
Received: 19 March 2023 / Accepted: 9 May 2023 / Published Online: 21 May 2023
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Abstract

Stock indexes are used as a barometer of economic health, and fluctuations in these markets can have a substantial influence on the economy. For example, the Covid-19 pandemic caused severe economic disruption, as reflected in stock market indexes. Similarly, Russia's invasion of Ukraine has geopolitical implications that might undermine global trade and economic stability, impacting stock market indexes. Considering these developments, the purpose of this article is to examine the co-movements of the stock markets of Austria (ATX), Poland (WIG), the Czech Republic (PX Prague), Hungary (BUX), Croatia (CROBEX), Serbia (BELEX 15), Romania (BET), and Slovenia (SBI TOP) from February 16, 2018, to February 15, 2023. To achieve the research objectives, the aim is to answer the following research question: i) Have the events of 2020 and 2022 accentuated the co-movements between the stock markets in Central Europe? The results show the presence of 21 shocks between markets (out of a potential 56) during the Tranquil subperiod, with the WIG stock index having a greater predictive influence on the behavior of its peers (4 shocks out of 7 possible). During the Stress subperiod, 45 shocks were confirmed (out of 56 possible). The markets that triggered the most market shocks (7 out of 7 possibilities) were BET, BUX, CROBEX, and SBI TOP. The research question was validated based on the conclusion supplied, as all markets increased their movements, showing a considerable effect of the 2020 and 2022 events on these markets.

Keywords: Events of 2020 and 2022; Stock markets; Co-movements; Portfolio diversification;
Copyright: © 2023 by Teixeira Dias, Chambino and Rebolo Horta. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
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ACS Style
Teixeira Dias, R. M.; Chambino, M.; Rebolo Horta, N. Short-Term Shocks Between Central European Stock Markets: An Approach During The 2020 and 2022 Events. Journal of Economic Analysis, 2023, 2, 34. https://doi.org/10.58567/jea02030005
AMA Style
Teixeira Dias R M, Chambino M, Rebolo Horta N. Short-Term Shocks Between Central European Stock Markets: An Approach During The 2020 and 2022 Events. Journal of Economic Analysis; 2023, 2(3):34. https://doi.org/10.58567/jea02030005
Chicago/Turabian Style
Teixeira Dias, Rui M.; Chambino, Mariana; Rebolo Horta, Nicole 2023. "Short-Term Shocks Between Central European Stock Markets: An Approach During The 2020 and 2022 Events" Journal of Economic Analysis 2, no.3:34. https://doi.org/10.58567/jea02030005
APA style
Teixeira Dias, R. M., Chambino, M., & Rebolo Horta, N. (2023). Short-Term Shocks Between Central European Stock Markets: An Approach During The 2020 and 2022 Events. Journal of Economic Analysis, 2(3), 34. https://doi.org/10.58567/jea02030005

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