DECODING FINANCIAL MECHANISMS: IN-DEPTH ANALYSIS OF STOCK MARKET DYNAMICS AND GLOBAL INVESTMENT STRATEGIES

Authors

  • Rusmiyati Rusmiyati Sekolah Tinggi Pertanian Kutai Timur, Indonesia
  • Eni Kriswandari Badan Perencanaan Pembangunan Daerah (BAPPEDA) Kabupaten Bantul, Indonesia
  • Ahmad Rizani Jurusan Ekonomi Pembangunan Universitas Palangka Raya, Indonesia
  • Endang Supriatna Universitas Linggabuana PGRI Sukabumi, Indonesia
  • Putri Anindyajati Badan Perencanaan Pembangunan Daerah (BAPPEDA) Kabupaten Bantul, Indonesia

Keywords:

Stock Market Dynamics, Global Investment Strategies, Financial Mechanisms, Literature Review, Macroeconomics, Regulatory Frameworks, Technological Advancements, Behavioral Finance, Ethical Considerations, Qualitative and Quantitative Insights.

Abstract

This study meticulously explores the intricate world of financial mechanisms, offering an in-depth analysis of stock market dynamics and global investment strategies. The research employs a comprehensive literature review methodology, synthesizing existing knowledge, theories, and empirical evidence. The investigation unfolds in multiple phases, from delineating research objectives to critically evaluating literature, ensuring a systematic approach. The literature review spans finance, economics, and investment management to provide a well-rounded perspective. Through rigorous inclusion and exclusion criteria, the study maintains the integrity of its sources, focusing on seminal works, empirical studies, and robust theoretical frameworks. Key findings emerge in thematic areas, unraveling the fundamental drivers of stock price movements, exploring the multifaceted realm of global investment strategies, and investigating the impact of regulatory frameworks on market dynamics. The study also delves into the interconnectedness between macroeconomics and finance, emphasizing the symbiotic relationship shaping financial landscapes. The research contemplates the ethical considerations influencing financial decision-making by bridging numerical indicators with human decisions. The influence of technological advancements, linkages between stock market crashes and economic depressions, and behavioral factors in investment decision-making further enrich the findings. The literature review's synthesis underscores the transformative impact of technological advancements on global investment strategies, the discernible correlation between stock market crashes and economic depressions, and the crucial role of behavioral factors in financial markets. Integrating qualitative and quantitative insights becomes paramount for a holistic understanding, emphasizing the need for an ethical framework in economic research. The study concludes with a nuanced comprehension of stock market dynamics and global investment strategies, paving the way for strategic decision-making in the ever-evolving landscape of international finance.

References

Acemoglu, D., & Robinson, J. A. (2020). The narrow corridor: States, societies, and the fate of liberty. Penguin.

Baker, M., & Wurgler, J. (2015). Do strict capital requirements raise the cost of capital? Bank regulation, capital structure, and the low-risk anomaly. American Economic Review, 105(5), 315-320.

Bansal, R., & Shaliastovich, I. (2013). A long-run risks explanation of predictability puzzles in bond and currency markets. The Review of Financial Studies, 26(1), 1-33.

Barberis, N., & Thaler, R. (2003). A survey of behavioral finance. Handbook of the Economics of Finance, 1, 1053-1128.

Barro, R. J., & Ursúa, J. F. (2017). Stock-market crashes and depressions. Research in Economics, 71(3), 384-398.

Bernanke, B. S. (2015). The courage to act: A memoir of a crisis and its aftermath.

Bordalo, P., Gennaioli, N., La Porta, R., & Shleifer, A. (2020). Expectations of fundamentals and stock market puzzles. National Bureau of Economic Research.

Campbell, J. Y., Lo, A. W., MacKinlay, A. C., & Whitelaw, R. F. (1998). The econometrics of financial markets. Macroeconomic Dynamics, 2(4), 559-562.

Cochrane, J. H. (2017). Macro-finance. Review of Finance, 21(3), 945-985.

Damodaran, A. (2012). Investment valuation: Tools and techniques for determining the value of any asset (Vol. 666). John Wiley & Sons.

Elton, E. J., Gruber, M. J., Brown, S. J., & Goetzmann, W. N. (2014). Modern Portfolio Theory and Investment Analysis.–7th Edition. USA: New York University.

Engle, R. (2002). Dynamic conditional correlation: A simple multivariate generalized autoregressive conditional heteroskedasticity model class. Journal of Business & Economic Statistics, 20(3), 339-350.

Eriksson, A., & Leijon, E. (2023). Patience, the feminine virtue of investing: A mixed-methods approach to studying gender-based investment behaviors and the investment gap.

Fama, E. F., & French, K. R. (1993). Common risk factors in the returns on stocks and bonds. Journal of financial economics, 33(1), 3-56.

Gamlen, A., & McIntyre, C. (2018). Mixing methods to explain emigration policies: A post-positivist perspective. Journal of mixed methods research, 12(4), 374-393.

Goetzmann, W. N., Brown, S. J., Gruber, M. J., & Elton, E. J. (2014). Modern portfolio theory and investment analysis. John Wiley & Sons, 237.

Gong, X. L., Liu, J. M., Xiong, X., & Zhang, W. (2022). Research on stock volatility risk and investor sentiment contagion from a multi-layer dynamic network perspective. International Review of Financial Analysis, 84, 102359.

Gormsen, N. J., & Koijen, R. S. (2020). Coronavirus: Impact on stock prices and growth expectations. The Review of Asset Pricing Studies, 10(4), 574-597.

Hansen, L. P., & Sargent, T. J. (1983). The dimensionality of the aliasing problem in models with rational spectral densities. Econometrica: Journal of the Econometric Society, 377-387.

Harvey, C. R., Liu, Y., & Zhu, H. (2016). … and the cross-section of expected returns. The Review of Financial Studies, 29(1), 5-68.

Hirshleifer, D. (2015). Behavioral finance. Annual Review of Financial Economics, 7, 133-159.

Lettau, M., & Pelger, M. (2020). Estimating latent asset-pricing factors. Journal of Econometrics, 218(1), 1-31.

Lo, A. (2017). Adaptive markets: Financial evolution at the speed of thought. Princeton University Press.

Menkhoff, L., Sarno, L., Schmeling, M., & Schrimpf, A. (2012). Currency momentum strategies. Journal of Financial Economics, 106(3), 660-684.

Mishkin, F. S., & Eakins, S. G. (2006). Financial markets and institutions. Pearson Education India.

Moyo, D. (2018). Edge of Chaos: Why democracy fails to deliver economic growth and how to fix it. Basic Books.

Narayanan, A., Bonneau, J., Felten, E., Miller, A., & Goldfeder, S. (2016). Bitcoin and cryptocurrency technologies: a comprehensive introduction. Princeton University Press.

Nye Jr, J. S. (2015). Is the American century over? Political Science Quarterly, 130(3), 393-400.

Pástor, Ľ., & Vorsatz, M. B. (2020). Mutual fund performance and flows during the COVID-19 crisis. The Review of Asset Pricing Studies, 10(4), 791-833.

Shiller, R. J. (2015). Irrational exuberance. In Irrational exuberance. Princeton University Press.

Stambaugh, R. F. (2014). Presidential address: Investment noise and trends. The Journal of Finance, 69(4), 1415-1453.

Swedroe, L. E., & Berkin, A. L. (2015). The Incredible Shrinking ALPHA. Rep, 39(3), 58-62.

Taylor, J. B. (2012). First principles: five keys to restoring America's prosperity. WW Norton & Company.

van Mastrigt, O. (2018). We are enhancing aroma production by lactic acid bacteria at near-zero growth rates: a retentostat approach (Doctoral dissertation, Wageningen University, and Research).

Downloads

Published

2024-01-22

Issue

Section

Articles