The U.S.-China trade conflict impacts on the Chinese and U.S. stock markets: A network-based approach

Yanhua Chen and Athanasios A. Pantelous

Finance Research Letters, 2022, vol. 46, issue PB

Abstract: We explore how the U.S.-China trade conflict impacted the Chinese and U.S. stock markets at industry level. Employing a transfer entropy-based technique, the directional non-linear information transmission networks respectively composed of 56 Chinese and 49 U.S. industries are constructed. Then, we identify systemically important industries and transmission paths by implementing the maximum spanning tree approach. Chinese industries exhibit more exposure to the trade tensions when compared to the U.S. counterparts. Results highlight industries of public utilities, industrial equipment manufacturing, and financials playing a dominant role in China’s stock market, while financials, mining and quarrying, retail trade, and manufacturing have central role in the U.S.

Keywords: 2018-20 U.S.-China trade war; Stock market; Economic industry; Non-linear information spillover (search for similar items in EconPapers)
JEL-codes: C22 C61 G15 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:46:y:2022:i:pb:s1544612321004621

DOI: 10.1016/j.frl.2021.102486

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