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The Impact of China-Pak Economic Corridor (CPEC) on Pakistan Stock Exchange (PSX)

Author

Listed:
  • Muhammad Mudasar Ghafoor
  • Zahid Hussain
  • Muhammad Yasir Saeed

Abstract

Purpose: The study aims to find out the impact of CPEC project on volatility and growth of Pakistan stock exchange PSX-100. The CPEC is a significant subset and southern corridor of (SREB) which consists of three economic corridors (Rana, 2015). The investment in CPEC projects not only accelerates Pakistan and Chinese economy but also anticipated to have significant effects on Pakistan stock exchange PSX.Design/Methodology/Approach: The methodology of event study proposed by Bremer and Sweeney (1991). The methodology of Cox and Peterson (1994) used to identify the effects of events related to CPEC projects and stock market returns.Findings: The results indicated that the volatility of PSX-100 has low in post CPEC as compared to pre CPEC era showing a positive effect of CPEC on PSX in the form of stable PSX 100 returns in post CPEC announcement era.Implications/Originality/Value: The results of this empirical study provide important implications to overseas investors, corporations and regulators.

Suggested Citation

  • Muhammad Mudasar Ghafoor & Zahid Hussain & Muhammad Yasir Saeed, 2020. "The Impact of China-Pak Economic Corridor (CPEC) on Pakistan Stock Exchange (PSX)," Journal of Business and Social Review in Emerging Economies, CSRC Publishing, Center for Sustainability Research and Consultancy Pakistan, vol. 6(4), pages 1323-1333, December.
    • Handle: RePEc:src:jbsree:v:6:y:2020:i:4:p:1323-1333
    DOI: http://doi.org/10.26710/jbsee.v6i4.1403
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    Cited by:

    1. Shahid Raza & Sun Baiqing & Imtiaz Hussain & Pwint Kay-Khine, 2023. "Do good and bad news affect the day of the week effect? An analysis of the KSE-100 Index," SN Business & Economics, Springer, vol. 3(7), pages 1-22, July.

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