Are European Stock Markets Influencing Latin American Stock Markets?
Rivas Andrés*
Rodríguez Antonio**
Albuquerque Pedro H. ***

Abstract
In this study, we examine the response of Latin American stock markets to movements in European stock markets. Our results vary depending on the openness of the country in terms of international trade. We find evidence that Latin American stock markets are affected by Spanish stock market. Additionally, during the second and third-periods (1995 to 1998 and 1999 to 2004) Spain appears to have much stronger ties (such as more trade) with Brazil and Chile, and this might explain why Brazil and Chile are affected from Spain and not from the other European markets. This study uncovers two important findings. First, Spain has an effect on Latin American markets but these responses are not homogeneous across markets. Second, the magnitude of Spain’s influence is different in each of the three sub-periods under study.

Keywords: Emerging Markets, Latin America, Stock Markets Interdependence.
JEL Clasification: F30, G15, O54, C22.

* Texas A&M International University.
** Texas A&M International University, Professor of Finance and Associate Dean, Department of Accounting, Economics and Finance; College of Business Administration (rodriguez@tamiu.edu)
*** Texas A&M International University.

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