{"title":"Dynamic financial connectedness among the US, China, and countries of the Belt and Road Initiative","authors":"Walter Bazán-Palomino, Diego Winkelried","doi":"10.1016/j.ememar.2025.101286","DOIUrl":null,"url":null,"abstract":"<div><div>How have the financial linkages among the US, China, and emerging markets changed since the launch of the Belt and Road Initiative (BRI)? Using intraday data from 2013 to 2023, we study the financial connectedness of stock markets in the US, China, and the regions with BRI countries. Our time-varying measures of connectedness indicate that the BRI has not significantly changed the financial relationships between China and BRI countries nor has it diminished the financial connections between these countries and the US. Our net directional connectedness analysis finds that the Middle East and Africa region, and the Central Asia and Europe region are the most susceptible to shocks from the US and China. Policymakers and investors should be concerned about periods and regions susceptible to American and Chinese financial shocks, as these can increase network connectivity, thereby heightening financial instability and reducing the benefits of portfolio diversification.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"66 ","pages":"Article 101286"},"PeriodicalIF":4.6000,"publicationDate":"2025-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Emerging Markets Review","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1566014125000354","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
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Abstract
How have the financial linkages among the US, China, and emerging markets changed since the launch of the Belt and Road Initiative (BRI)? Using intraday data from 2013 to 2023, we study the financial connectedness of stock markets in the US, China, and the regions with BRI countries. Our time-varying measures of connectedness indicate that the BRI has not significantly changed the financial relationships between China and BRI countries nor has it diminished the financial connections between these countries and the US. Our net directional connectedness analysis finds that the Middle East and Africa region, and the Central Asia and Europe region are the most susceptible to shocks from the US and China. Policymakers and investors should be concerned about periods and regions susceptible to American and Chinese financial shocks, as these can increase network connectivity, thereby heightening financial instability and reducing the benefits of portfolio diversification.
期刊介绍：
The intent of the editors is to consolidate Emerging Markets Review as the premier vehicle for publishing high impact empirical and theoretical studies in emerging markets finance. Preference will be given to comparative studies that take global and regional perspectives, detailed single country studies that address critical policy issues and have significant global and regional implications, and papers that address the interactions of national and international financial architecture. We especially welcome papers that take institutional as well as financial perspectives.
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