Trade Conflict and Dynamic Changes in International Listed Company Stock Price: Evidence from Tesla

Abstract

The occurrence of Sino-US trade war makes listed companies engaged in import and export trade bear two-way pull. On the one hand, the appreciation of the dollar to attract global capital into the U. S. markets, is a favorable contributing factor to rising stock prices; on the other hand, the trade protection policy of the United States has caused other countries to fight back. The increasing trade barriers have made the revenue of import and export enterprises decline, which is an unfavorable factor for stock prices. This paper selects Tesla, an international listed company, as the research object. The dynamic relationship between Tesla stock price and USD/RMB exchange rate is analyzed without any prior constraint, and then ARMA-GARCH model is constructed to simulate and predict stock return and volatility after introducing exchange rate as external explanatory variable, and based on the empirical results, puts forward reasonable and feasible suggestions for the development of international listed companies.