Paula Heliodoro – Escola Superior de Ciências Empresarias – Institute Polytechnic of Setúbal, Portugal

Rui Dias – Escola Superior de Ciências Empresarias – Institute Polytechnic of Setúbal, Portugal & CEFAGE, University
of Évora, Portugal

Paulo Alexandre – Escola Superior de Ciências Empresarias – Institute Polytechnic of Setúbal, Portugal

Cristina Vasco – IEFP – Instituto do Emprego e Formação Profissional, Alcácer do Sal, Portugal


4th International Scientific Conference – EMAN 2020 – Economics and Management: How to Cope With Disrupted Times, Online/Virtual, September 3, 2020, SELECTED PAPERS published by: Association of Economists and Managers of the Balkans, Belgrade, Serbia; ISBN 978-86-80194-31-8, ISSN 2683-4510


This paper aims to analyse financial integration in the markets of Brazil, China, India and
Russia (BRIC’s), from July 2015 to June 2020, being the sample split in pre and during the global
pandemic (Covid-19). In order to carry out this analysis, different approaches were undertaken to analyse
two issues, namely, whether: (i) the global pandemic has accentuated the interdependencies in
the BRIC financial markets? If so, how it has influenced the efficiency of portfolio diversification. The
results suggest very significant levels of integration, in the Covid period these evidences diminish the
chances of portfolio diversification in the long term. In turn, the analysis of the relationship between
markets, in the short term, through the impulse response functions, in a period of global pandemic,
shows positive/negative movements, with statistical significance, with persistence exceeding one week.
In addition, there was no immediate adjustment in prices between markets, due to the high levels
of shocks identified. Regarding the implementation of efficient portfolio diversification strategies, we
consider that a good option for investors would be to avoid investments in stock markets. In this sense,
one suggestion could be to invest in derivatives, gold and sovereign debt markets, with the purpose of
diversifying portfolios and mitigating the risk arising from the global pandemic. The authors consider
that the results achieved are of interest to investors seeking opportunities in these exchanges, as well as
to policy makers to undertake institutional reforms in order to increase the efficiency of stock markets
and promote the sustainable growth of financial markets.


COVID-19; Financial integration; Arbitration; Risk diversification.


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