 A study of financial market resilience in China — From a hot money shock perspectiveChun Tang, Xiaoxing Liu and Guangyi Yang Pacific-Basin Finance Journal, 2024, vol. 83, issue C Abstract: Given the huge impact of hot money on the China's financial market, it is crucial to evaluate and improve the ability to withstand such shocks. This paper measures the resilience of China's financial markets to hot money shocks, and examines the connectedness mechanism among submarket resilience. Our findings indicate that, first, China's overall financial market resilience is characterized by cyclical changes. Among all markets, the bond market exhibits the strongest ability to absorb shocks, while the real estate market shows the weakest. Second, there is a considerable association between financial submarket resilience, which is further strengthened by panic and pessimistic expectations in tail scenarios. The stock market holds the central position in the resilience connectedness structure and shows the greatest impact on other markets. This study suggests that focusing on real estate and stock market conditions is the key to accelerating financial market recovery from hot money shocks. Keywords: Financial market resilience; Hot money; Connectedness effect; Investor sentiment (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:83:y:2024:i:c:s0927538x24000076 DOI: 10.1016/j.pacfin.2024.102256 Access Statistics for this article Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee More articles in Pacific-Basin Finance Journal from Elsevier |
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