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Int. J. Financial Stud. 2018, 6(2), 51; https://doi.org/10.3390/ijfs6020051

The Impact of Brexit on the Stock Markets of the Greater China Region

1
Department of Accounting and Finance, Dublin Institute of Technology, Dublin D02, Ireland
2
Jean Monnet Chair of Economics, Kemmy Business School, University of Limerick, Limerick V94 T9PX, Ireland
3
International Research Fellow, Ruhr University Bochum, 44801 Bochum, Germany
*
Author to whom correspondence should be addressed.
Received: 31 January 2018 / Revised: 7 May 2018 / Accepted: 7 May 2018 / Published: 10 May 2018
(This article belongs to the Special Issue Impact of Brexit on Financial Markets)
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Abstract

An examination of Brexit and its initial impact on the main stock markets in the Greater China Region (GCR) was conducted using augmented market models that integrate Economic Policy Uncertainty (EPU) and implied volatility (VIX). The results do not seem to align with research in the field that has suggested that the EPU index helps to identify if market participants are reacting to political events. The main research findings suggest that Brexit does not appear to have an impact on the performance of market returns in the region and the influence of economic policy uncertainty in the GCR appears to be insignificant, except for Hong Kong. Overall, China’s stock markets do not seem to be panicking and overreacting to unfolding events in the UK, and market instability in the region appears to be more associated with global and regional events that are better captured by the VIX index. View Full-Text
Keywords: Brexit; rising China; globalisation; stock markets; Economic Policy Uncertainty; political turbulences Brexit; rising China; globalisation; stock markets; Economic Policy Uncertainty; political turbulences
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).
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Morales, L.; Andreosso-O’Callaghan, B. The Impact of Brexit on the Stock Markets of the Greater China Region. Int. J. Financial Stud. 2018, 6, 51.

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