The Impact of Market-to-Market Linkages on the Rise and Fall of Markets:

Homogeneity of Information and Market Performance

Abstract

This study has the research question of what factors cause markets to decline because they are not suitable for their environment. The objective is to demonstrate the impact of the nature of information flowing into a market on its performance by focusing on the linkages between markets. We analyzed 1,568 time-series data from 224 markets in seven periods for markets in which Japanese firms in the chemical industry. The results of the analysis indicate that the more closed a market is, the poorer the market performance. The practical contribution of this study is that it has demonstrated the importance of having a market strategy that looks to the future of the market.