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Trade War Risk and Valuations of Companies Listed Overseas: an Empirical Study on China Concept Stocks

Author

Listed:
  • Yan Peng

    (School of Economics and Management, Wuhan University)

  • Song Li

    (School of Economics and Management, Wuhan University)

  • Lijia Wei

    (School of Economics and Management, Wuhan University)

Abstract

This article explores the impacts of the U.S.—China on the valuations of Chinese companies listed in the United States. The results reveal that the trade war negatively impacts the daily returns of Chinese concept stocks (CCSs). With other factors controlled for, as the U.S. TPU index rises, the daily returns of CCSs decrease remarkably, and their connection with the daily returns of bilateral markets is strengthened. Furthermore, we find that with the four stages of the trade war, namely, outbreak, truce, recurrence, and mitigation, the daily returns of CCSs have correspondingly fallen, stabilized, and then fallen and stabilized again.

Suggested Citation

  • Yan Peng & Song Li & Lijia Wei, 2022. "Trade War Risk and Valuations of Companies Listed Overseas: an Empirical Study on China Concept Stocks," Annals of Economics and Finance, Society for AEF, vol. 23(1), pages 95-139, May.
    • Handle: RePEc:cuf:journl:y:2022:v:23:i:1:pengliwei
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    References listed on IDEAS

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    Cited by:

    1. Shijie Wang, 2023. "Accounting vs. Politics: Effects of China-US Audit Cooperation on China Concept Stocks," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 13(5), pages 1-6.

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    More about this item

    Keywords

    Overseas Listing; Investor Sentiment; China Concept Stocks; Valuation;
    All these keywords.

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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