The Stock Connect to China
AEA Papers and Proceedings
vol. 113,
May 2023
(pp. 125-30)
Abstract
As a bridge between Chinese mainland and international financial markets, the Stock Connect program allows investors on both sides to gain mutual access. By analyzing how cross-border flows respond to macro-related shocks, we show that compared with possibly homemade foreign investors, genuine foreign investors are more likely affected by the US monetary shocks, the exchange rate risk, the US market performance, and the cross-market valuation disparity. The paper highlights the importance of profiling different groups of cross-border participants over market integration.Citation
He, Zhiguo, Yuehan Wang, and Xiaoquan Zhu. 2023. "The Stock Connect to China." AEA Papers and Proceedings, 113: 125-30. DOI: 10.1257/pandp.20231003Additional Materials
JEL Classification
- E52 Monetary Policy
- G12 Asset Pricing; Trading Volume; Bond Interest Rates
- G15 International Financial Markets
- G18 General Financial Markets: Government Policy and Regulation
- O16 Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- P24 Socialist Systems and Transitional Economies: National Income, Product, and Expenditure; Money; Inflation
- P34 Socialist Institutions and Their Transitions: Financial Economics