Stock Market Interaction with US Dollar Exchange Rates Using Panel Data Analysis: Evidence from BRIC Countries

K. Priya, Dr.T. Ramachandran and Dr.B. Prem Kumar

During recent years, BRIC (Brazil, Russia, India, China) nations have emerged as a favorable destination for global investors due to economic stability. Many researchers explore the nexus of Stock prices with exchange rates, though literature is still unclear. This study explores the stock price interaction of BRIC nation with US Dollar exchange rates for sample period January 2001 to December 2018. Robust econometric tests like panel unit tests, Pedroni Panel Co-integration, Johansen Fisheri Cointegration and Panel Stack Grangeri Causality test has been employed to establish long-term linkages. However, the results shows no co integration found between the stock prices of BRIC countries with exchange rates, and there is a unidirectional causality runs from stock prices to exchange rates.

Volume 12 | Issue 7

Pages: 255-264

DOI: 10.5373/JARDCS/V12I7/20202007