The Stock Connect to China

Zhiguo He (), Yuehan Wang and Xiaoquan Zhu

AEA Papers and Proceedings, 2023, vol. 113, 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.

JEL-codes: E52 G12 G15 G18 O16 P24 P34 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1257/pandp.20231003

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