Transmission Mechanism of Stock Price Fluctuation in the Rare Earth Industry Chain

Yanjing Jia,Zhiliang Dong,Chao Ding

doi:10.3390/su132212913

Abstract

The transmission of stock price fluctuations of listed companies in the rare earth industry has complex characteristics. Mastering its transmission law is of great meaning to understand the relationship between the upstream and downstream of the rare earth industry chain and market investment. This article uses the time series of daily closing prices of stocks in the global rare earth industry chain in the past ten years as the research object. The Granger causality test and complex network theory were used to construct the risk transmission network of the industrial chain. We have identified the key stocks in the network of stock price fluctuation in the rare earth industry chain and obtained the transmission path of stock price fluctuation. According to the results: (1) The stocks of Chinese and Japanese listed companies considerably influence the transmission of the stock price fluctuation in the rare earth industry chain. (2) The transmission distance of the stock price fluctuation of each network is relatively small, and the transmission speed is relatively fast. (3) The fluctuation of stock price in the rare earth industry chain is mainly transmitted from the upstream and midstream links to the midstream and downstream links.

Highlights

Rare earth materials are strategic resources known as “industrial vitamins”. These materials are separated into light and heavy rare earth materials according to the differences in the mineral characteristics
Rare earth materials are used in the military [1], metallurgical [2], petrochemical [3], and other fields; the development of the rare earth industry is crucial for the evolution of modern industries
(Germany), the remaining stocks which are strongly affected by the price fluctuation of other stocks in the whole industrial chain are greatly affected by the price fluctuation of other stocks in their own links. This finding indicates that fluctuation in the stock price of the entire rare earth industry on the chain is highly correlated. Such stocks must be emphasized in their links and in the whole rare earth industry chain

Summary

Introduction

Rare earth materials are strategic resources known as “industrial vitamins”. These materials are separated into light and heavy rare earth materials according to the differences in the mineral characteristics. The upstream, midstream and downstream links of the industrial chain are responsible for the progress of the rare earth ore, rare earth smelting and separation, and deep processing and application. The study of the fluctuation transmission mechanism of the stock prices of listed companies upstream, midstream, and downstream of the rare earth industry chain has two functions. The transmission mechanism of the stock price fluctuation in the rare earth industry chain can be comprehensively analyzed

Methods

Results

Conclusion