“This delay in the incorporation of information can play a very important role, especially for investors, regulators and policy makers,” because information can “allow timely detection of local economic crises that can destabilize financial markets.”
Industries from countries like Germany, Canada, China, France, Japan and the UK are slow to respond to information from industries in the United States of America (USA), The study was released Thursday.
According to the study, conducted by researchers from the University of Coimbra, industries in these countries “show a delayed reaction to disturbances in the industries of the United States of America (USA) due to the delay in transmission of information.”
“This delay in integrating information can have a very important role, especially for investors, regulators and policymakers,” because the information can “allow timely detection of local economic crises that can destabilize financial markets.”justified.
The research team consists of Ana Sofía Monteiro, Nuno Silva and Helder Sebastião, researchers from the Research Center in Economics and Management and professors at the Faculty of Economics of the University of Coimbra.
The assimilation of information by financial markets does not occur immediately due to limitations in its processing by its investors and frictions in the markets, and although technological progress in the past decades has narrowed the gap between the production of information and its incorporation into pricing systems, in international markets this discrepancy may still be evident. the investigators explained.
For this investigation, the transfer of information, through investor transactions, between US industries and six other major economies (Germany, Canada, China, France, Japan and the United Kingdom) was analyzed using an updated database.
This database includes “recent periods of turmoil in stock markets, resulting from the emergence of the euro, the subprime mortgage crisis, the sovereign debt crisis, trade tension between China and the United States, Britain’s exit from the European Union, and the Covid-19 pandemic.”
According to the researchers, the study highlights “the international leadership role of the United States, and in particular, the basic materials industries (such as metals, chemicals, and forest products) and energy, which have significant predictive power.”
They add that “this leadership is more pronounced during recessions,” when “correlations between countries are higher, and processing is slower due to a higher level of uncertainty.”
