Global Economic Factors and the Latin American Stock Markets

Abstract

Abstract This study aimed to analyze the structural dependence between the stock markets of the Latin American countries – Brazil, Chile, Colombia, Mexico, and Peru and the global stock market return and volatility, the commodity prices, and the US political-economic uncertainty from 1998 to 2017. We applied the quantile regression approach under different market circumstances and the results show that global stock market return and commodity prices are the most significant influencers in Latin America. These results are of interest to stakeholders, such as international investors and portfolio managers in the Latin American stock market, due to the market’s growing dynamism after integration into global financial markets and its role in investment diversification.