Are the New Economy Stocks Independent of the Economy: A Comparison of USA and India

Abstract

With the information and communication technology revolution, the global economy is transforming from a low productive, manufacture based ‘old’ economy to a knowledge based, service oriented and highly productive ‘new’ economy. In this new era, composition of stock market has changed significantly with the new economy sector adding values to the stock markets. This article inquires whether this is the initiation of a new era of changed stock price behaviour at least in the context of the new economy stocks that characterizes all the financial markets experiencing e-revolution irrespective of their level of development. It confirms a special characteristic of new economy stocks that holds across countries.