Stock Market Dynamics and Price Formation in Latin American Emerging Markets
DOI:
https://doi.org/10.47187/mktdescubre.4.E.E..66Keywords:
Price formation, Stock exchange, VAR model, Emerging markets, Latin AmericaAbstract
This research article analyzes price formation and stock market dynamics in Latin American emerging economies over the period 2000–2025 using a mixed-methods approach. On the quantitative side, Vector Autoregressive (VAR) models are estimated with monthly data from the main stock indices in the region (Ibovespa, S&P/BMV IPC, S&P IPSA, COLCAP, S&P/BVL General, S&P Merval, Ecuindex, and IBB), grouped into three blocks of analysis. The qualitative component relies on a systematic review of the literature, institutional reports, and expert opinions to contextualize the econometric evidence. The results reveal a limited and asymmetric interconnection among markets, where Brazil emerges as the main regional transmitter of financial shocks, while Mexico remains more closely aligned with global economic cycles. In contrast, Chile, Peru, and Colombia exhibit short-lived positive responses to external impulses, and Ecuador and Bolivia show structural independence from regional fluctuations. The study concludes that institutional quality, market transparency, and information asymmetry remain key determinants of price volatility in Latin American emerging stock markets.
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Copyright (c) 2026 José Luis López Salazar, Freddy M. Armijos-Arcos, Jazmín Isabel García-Guerra
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