Author(s)

Zixuan Wang

Corresponding Author

Zixuan Wang

ABSTRACT

Global economic integration is gradually gaining traction, and the correlation between stock markets in capitalist countries is improving. Modern capitalist countries gave birth to the stock market. Does it apply to countries that are socialist? Is there any correlation between the stock markets of communist and capitalist countries? For the purposes of analysis and research, this paper will choose representative capitalism and socialist countries. China is a good example for socialist countries, while New York, Tokyo, and London are good examples for capitalist countries. The following perspectives will be used to theoretically analyze the linkage characteristics of stock markets in socialist and capitalist countries: stock market development, stock market characteristics in different countries under different polities, and stock market linkage characteristics in different countries under different perspectives. The following are the primary conclusions: To begin with, the stock market of socialist countries and that of capitalist countries are in an independent state, there is no long-term linkage relationship. Second, following the introduction of QDII, the US and UK stock markets have a considerable guiding influence on the Chinese stock market's opening and closing prices, whereas the capitalist stock market has a modest guiding effect on the socialist stock market.

KEYWORDS

Stock Market, Linkage, Capitalism, Economic Foundation Hypothesis