Network Risk Diffusion and Resilience in Emerging Stock Markets
With the acceleration of globalization, the connections between emerging market economies are becoming increasingly intricate, making it crucial to understand the mechanisms of risk transmission. This study employs the transfer entropy model to analyze risk diffusion and network resilience across te...
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| Format: | Article |
| Language: | English |
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MDPI AG
2025-05-01
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| Series: | Entropy |
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| Online Access: | https://www.mdpi.com/1099-4300/27/5/533 |
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| author | Jiang-Cheng Li Yi-Zhen Xu Chen Tao |
| author_facet | Jiang-Cheng Li Yi-Zhen Xu Chen Tao |
| author_sort | Jiang-Cheng Li |
| collection | DOAJ |
| description | With the acceleration of globalization, the connections between emerging market economies are becoming increasingly intricate, making it crucial to understand the mechanisms of risk transmission. This study employs the transfer entropy model to analyze risk diffusion and network resilience across ten emerging market countries. The findings reveal that Brazil, Mexico, and Saudi Arabia are the primary risk exporters, while countries such as India, South Africa, and Indonesia predominantly act as risk receivers. The research highlights the profound impact of major events such as the 2008 global financial crisis and the 2020 COVID-19 pandemic on risk diffusion, with risk diffusion peaking during the pandemic. Additionally, the study underscores the importance of network resilience, suggesting that certain levels of noise and shocks can enhance resilience and improve network stability. While the global economy gradually recovered following the 2008 financial crisis, the post-pandemic recovery has been slower, with external shocks and noise presenting long-term challenges to network resilience. This study emphasizes the importance of understanding network resilience and risk diffusion mechanisms, offering new insights for managing risk transmission in future global economic crises. |
| format | Article |
| id | doaj-art-58ae492556a84785915fcec80681cb4e |
| institution | Kabale University |
| issn | 1099-4300 |
| language | English |
| publishDate | 2025-05-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Entropy |
| spelling | doaj-art-58ae492556a84785915fcec80681cb4e2025-08-20T03:47:49ZengMDPI AGEntropy1099-43002025-05-0127553310.3390/e27050533Network Risk Diffusion and Resilience in Emerging Stock MarketsJiang-Cheng Li0Yi-Zhen Xu1Chen Tao2School of Finance, Yunnan University of Finance and Economics, Kunming 650221, ChinaSchool of Economics, Yunnan University of Finance and Economics, Kunming 650221, ChinaSchool of Economics, Yunnan University of Finance and Economics, Kunming 650221, ChinaWith the acceleration of globalization, the connections between emerging market economies are becoming increasingly intricate, making it crucial to understand the mechanisms of risk transmission. This study employs the transfer entropy model to analyze risk diffusion and network resilience across ten emerging market countries. The findings reveal that Brazil, Mexico, and Saudi Arabia are the primary risk exporters, while countries such as India, South Africa, and Indonesia predominantly act as risk receivers. The research highlights the profound impact of major events such as the 2008 global financial crisis and the 2020 COVID-19 pandemic on risk diffusion, with risk diffusion peaking during the pandemic. Additionally, the study underscores the importance of network resilience, suggesting that certain levels of noise and shocks can enhance resilience and improve network stability. While the global economy gradually recovered following the 2008 financial crisis, the post-pandemic recovery has been slower, with external shocks and noise presenting long-term challenges to network resilience. This study emphasizes the importance of understanding network resilience and risk diffusion mechanisms, offering new insights for managing risk transmission in future global economic crises.https://www.mdpi.com/1099-4300/27/5/533risk diffusionnetwork resilienceemerging market economiesextreme risk events |
| spellingShingle | Jiang-Cheng Li Yi-Zhen Xu Chen Tao Network Risk Diffusion and Resilience in Emerging Stock Markets Entropy risk diffusion network resilience emerging market economies extreme risk events |
| title | Network Risk Diffusion and Resilience in Emerging Stock Markets |
| title_full | Network Risk Diffusion and Resilience in Emerging Stock Markets |
| title_fullStr | Network Risk Diffusion and Resilience in Emerging Stock Markets |
| title_full_unstemmed | Network Risk Diffusion and Resilience in Emerging Stock Markets |
| title_short | Network Risk Diffusion and Resilience in Emerging Stock Markets |
| title_sort | network risk diffusion and resilience in emerging stock markets |
| topic | risk diffusion network resilience emerging market economies extreme risk events |
| url | https://www.mdpi.com/1099-4300/27/5/533 |
| work_keys_str_mv | AT jiangchengli networkriskdiffusionandresilienceinemergingstockmarkets AT yizhenxu networkriskdiffusionandresilienceinemergingstockmarkets AT chentao networkriskdiffusionandresilienceinemergingstockmarkets |