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Does the Economic Policy Uncertainty in the USA and China Affect Indian Stock Markets Symmetrically and Asymmetrically? An Empirical Analysis of Pre- and Post-Coronavirus Disease 2019 Timelines

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  • Aamir Aijaz Syed
  • Muhammad Abdul Kamal

Abstract

Globalization and economic interconnections have recently garnered a lot of attention, and scholars and policymakers are delving into the effects of policy uncertainty on macroeconomic fundamentals against this backdrop, the current study investigates the symmetric and asymmetric effects of economic policy uncertainty (EPU) in the USA and China on the Indian benchmark index. Furthermore, the study also analyses the variation in results due to the occurrence of uncertain events. For the empirical analysis, non-linear autoregressive distributed lag (NARDL) and autoregressive distributed lag (ARDL) techniques have been employed, and the findings substantiate an asymmetric relationship between the US EPU and the Indian stock market, while a symmetric relationship between the Chinese EPU and the Indian stock market. The study also reveals that in the short run, the Indian stock market is immune to the fluctuations in the Chinese stock market and policy uncertainty. Moreover, the outcomes further reveal that the US and Indian stock markets project a mirror performance. In addition, the study further reveals that, unlike the pre-Coronavirus Disease 2019 (COVID-19) timeline, during the COVID-19, the short-run volatility was high between the explanatory and outcome variables. The study is an original work and offers several useful recommendations.

Suggested Citation

  • Aamir Aijaz Syed & Muhammad Abdul Kamal, 2026. "Does the Economic Policy Uncertainty in the USA and China Affect Indian Stock Markets Symmetrically and Asymmetrically? An Empirical Analysis of Pre- and Post-Coronavirus Disease 2019 Timelines," Global Business Review, International Management Institute, vol. 27(2), pages 275-294, April.
    • Handle: RePEc:sae:globus:v:27:y:2026:i:2:p:275-294
    DOI: 10.1177/09721509221119708
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