Study on the Linkage Effect between China and South Korea Stock Market

As the trend of the world financial integration gradually strengthen, the research of the relationship between different stock markets mean a lot to improve the capital markets. The purpose of this article is to explore the linkage effect of market between China and South Korea. There is no evidence to prove that the five variables on behalf of the Chinese stock market have any relationship with KOSPI200 index by the granger causality test. There is no co-integration relationship between two markets by using co integration test to explore the long-term stable equilibrium relationship between China and South Korea stock markets. Therefore there is no significant relationship between China and South Korea market.