The Puzzle of the Harmonious Stock Prices

Posted: 7 Jun 2013

See all articles by Randall Morck

Randall Morck

University of Alberta - Department of Finance and Statistical Analysis; National Bureau of Economic Research (NBER); European Corporate Governence Institute; Asian Bureau of Finance and Economic Research

Bernard Yin Yeung

National University of Singapore - Business School

Date Written: July 3, 2001

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 behavior of individual firms. Rather, stock prices move more independently in countries that are less corrupt.

Suggested Citation

Morck, Randall K. and Yeung, Bernard Yin, The Puzzle of the Harmonious Stock Prices (July 3, 2001). World Economics 3(3) Jul./Sep. 2002; University of Alberta School of Business Research Paper No. 2013-615. Available at SSRN: https://ssrn.com/abstract=2275450

Randall K. Morck (Contact Author)

University of Alberta - Department of Finance and Statistical Analysis ( email )

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National Bureau of Economic Research (NBER)

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European Corporate Governence Institute ( email )

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Asian Bureau of Finance and Economic Research ( email )

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Bernard Yin Yeung

National University of Singapore - Business School ( email )

15 Kent Ridge Drive
BIZ 1 Level 6
Singapore, 119245
Singapore
65 6516 3075 (Phone)
65 6779 1365 (Fax)

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