Global Economic Policy Uncertainty, Liquidity of Hong Kong Stocks, and the A-H Share Price Discount

Guangzheng Zhou ()
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Guangzheng Zhou: Shanghai Maritime University

A chapter in Proceedings of the 2025 10th International Conference on Social Sciences and Economic Development (ICSSED 2025), 2025, pp 675-688 from Springer

Abstract: Abstract Using data from AH-listed companies and the Global Economic Policy Uncertainty Index from November 2013 to December 2023, this paper examines the impact of global economic policy uncertainty on the liquidity of H-shares of AH companies and, subsequently, the impact on the A-H share price discount resulting from changes in liquidity. The study finds that global economic policy uncertainty increases systemic risks, leading to the withdrawal of foreign institutional funds, which reduces the liquidity and valuation of the Hong Kong stock market and exacerbates the A-H share price discount. It also explores the heterogeneity of AH companies under the influence of global economic policy uncertainty, revealing that the impact of rising global economic policy uncertainty on the A-H share price discount is stronger among non-state-owned enterprises (non-SOEs), reflecting their greater sensitivity to market changes and reliance on market mechanisms to respond to changes in the A-H share price discount. In contrast, SOEs may enjoy more policy support and resource acquisition channels, resulting in a weaker response to changes in the independent variable.

Keywords: Global Economic Policy Uncertainty; Hong Kong Stock Market; Liquidity; A-H Share Price Discount (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-734-2_74

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DOI: 10.2991/978-94-6463-734-2_74

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