Document Type

Article

Publication Date

2022

DOI

10.1111/infi.12416

Publication Title

International Finance

Volume

25

Issue

3

Pages

396-415

Abstract

This paper investigates whether and how the development level of a country's digital economy affects stock price synchronicity. The results indicate that countries with high levels of digital economy development exhibit low stock price synchronicity. Additionally, by decomposing stock price synchronicity into systematic and firm‐specific stock return variations, we find that systematic (firm‐specific) variations of stock returns decrease (increase) with the level of a country's digitalization. These findings shed light on the future trend of stock price synchronicity in financial markets around the world and support the information‐based interpretation of stock price synchronicity.

Rights

© 2022 The Authors.

This is an open access article under the terms of the Creative Commons Attribution‐NonCommercial 4.0 International (CC BY-NC 4.0) License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited and is not used for commercial purposes.

ORCID

0000-0002-9780-6005 (Chen)

Original Publication Citation

Chen, C., Moeini Gharagozloo, M. M., Darougar, L., & Shi, L. (2022). The way digitalization is impacting international financial markets: Stock price synchronicity. International Finance, 25(3), 396-415. https://doi.org/10.1111/infi.12416

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