Analyis of Relationship between Selected Stock Exchanges in Euro Area Countries: A Quantitative Approach
Purpose: The purpose of this paper is to carry out an analysis of relationship between stock exchanges in Italy and Germany. Design/Methodology/Approach: The study employs a literature and methodology review in researching relationships between selected stock exchanges along with its own analysis of relationship between Italian and German stock exchanges with the use of Vector Autoregreesion method (VAR). Findings: From the theoretical analysis and carried out research it can be assessed that there is no long term relationship between German and Italian stock exchange, although shocks from German stock exchange are rather to be more influential on Italian stock exchange than vice versa. Practical Implications: Findings can be of use to teachers, academics and policy decision-makers. Originality/Value: The research can spur further discussion about the methods and measures of assessing the interconnectness between stock exchanges.