What does this research mean for the field?

US technology stocks and the ESG market act as net transmitters of market spillovers, while Chinese tech equities and the DeFi market act as net receivers, with trade tensions amplifying these dynamics. Novelty: ClaimNovelty.NOVEL_FINDING. Consensus alignment: ConsensusAlignment.NEUTRAL.

What question did this study set out to answer?

The research aims to understand how the largest US and Chinese tech equities are interconnected with ESG and DeFi markets, particularly under trade tensions.

March 14, 2026Future Business Journal1 citationsOpen Access

Multidimensional market connectedness amid escalating trade tensions: largest US and Chinese Tech equities, DeFi, and ESG

RORemy Jonkam ObenUniversity of Buea SDShikha DagaUniversity of Delhi AZAliya ZhakanovaNear East University

Key Points

The research aims to understand how the largest US and Chinese tech equities are interconnected with ESG and DeFi markets, particularly under trade tensions.
Analyzed daily price data from July 02, 2021, to April 22, 2025.
Utilized the Diebold–Yilmaz spillover framework.
Assessed connectedness across five dimensions: return co-movement, volatility spillovers, and risk contagion.
Examined effects before and during the 2025 trade tensions escalation.
Significant spillovers observed between US tech stocks and ESG markets, as well as between Chinese tech stocks.
Weaker connections noted among US–Chinese tech stocks, DeFi, and ESG markets.
Return co-movement showed the highest connectedness, while basic volatility transmission exhibited the lowest.
US tech stocks generally acted as net transmitters, while Chinese tech equities and DeFi markets were net receivers.

Abstract

Abstract This study investigates connectedness among the largest US and Chinese technology equities, Environmental, Social, and Governance (ESG) investments, and decentralized finance (DeFi) markets. The study uses daily prices from July 02, 2021, to April 22, 2025, and employs the Diebold–Yilmaz spillover framework. Its novelty lies in its comprehensive analysis of market integration across five distinct connectedness dimensions: return co-movement, sophisticated volatility spillovers, basic volatility transmission, asymmetric risk contagion, and tail risk connectedness, and in its inclusion of both normal market conditions and the 2025 escalation of US–China trade tensions. Results reveal that US technology stock-only, Chinese technology stock-only, and US tech stock-ESG market spillovers are generally substantial, while US–Chinese tech stock, US tech stock-DeFi market, Chinese tech stock-ESG market, Chinese tech stock-DeFi market, and ESG-DeFi market transmissions are relatively weak. On average, return co-movement and sophisticated volatility spillovers (tail risk spillovers and basic volatility transmission) demonstrate the highest (lowest) connectedness. Across the connectedness dimensions, US technology stocks and the ESG market (Chinese tech equities and the DeFi market) generally acted as net transmitters (receivers). Additionally, the 2025 escalation of US–China trade tensions dramatically amplified spillovers across all dimensions. Given these findings, portfolio managers and institutional investors should implement multidimensional risk assessment frameworks, central banks and monetary policy authorities should establish technology-sector-focused systemic risk monitoring, and financial regulators should design multidimensional stress-testing protocols that simultaneously simulate geopolitical shock transmission across multiple risk channels. In addition, international trade policymakers should incorporate financial stability costs into trade policy decision-making frameworks. Graphical abstract

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