The Development of China's Stock Market and Stakes for the Global Economy

Jennifer N. Carpenter () and Robert F. Whitelaw ()
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Jennifer N. Carpenter: Stern School of Business, New York University, New York, NY 10012
Robert F. Whitelaw: Stern School of Business, New York University, New York, NY 10012

Annual Review of Financial Economics, 2017, vol. 9, issue 1, 233-257

Abstract: The rise of China and fivefold growth of its stock market over the past decade have fueled a growing literature on this market in financial economics. On the corporate side, researchers have evaluated the progress of China's stages of privatization, analyzed biases in the selection of firms for listing, and documented massive underpricing of initial public offerings. On the asset pricing side, researchers have studied the price premium of domestic A shares over their foreign-share counterparts, analyzed the firm-specific information content of prices, provided new evidence on informational and behavioral effects in prices, and begun to identify systematic cross-sectional patterns in returns. Numerous areas are ripe for future research as China's stock market continues to grow in global influence and as ongoing reform provides new natural experiments. Challenges for the field will be to gain familiarity with China's distinctive financial system and to avoid overapplying research paradigms developed for the US setting.

Keywords: A-share premium; capital allocation; global investing; listing choice; market integration; price informativeness (search for similar items in EconPapers)
JEL-codes: E44 F30 G12 G14 G15 G18 G32 G34 G38 G40 L20 O16 O53 P21 P31 P34 (search for similar items in EconPapers)
Date: 2017
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