IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v53y2021i48p5619-5642.html
   My bibliography  Save this article

Stock market liberalization and firm litigation risk——A quasi-natural experiment based on the Shanghai-Hong Kong Stock Connect policy

Author

Listed:
  • Zhen Huang
  • Weiwei Gao

Abstract

Taking the openness of the Shanghai-Hong Kong Stock Connect policy as an exogenous shock, this paper examines how the stock market liberalization affects litigation risks of underlying stock firms and its influencing mechanisms. We use a difference-in-differences (DID) approach to analyse the sample of A-share firms listed on the Shanghai Stock Exchange, and find that the stock market liberalization can better curb litigation risk of the underlying stock firms (i.e. the firms listed on the Shanghai Stock Exchange that can also be traded in the Hong Kong Stock Exchange) than that of the non-underlying stock firms. Further, we provide evidence that the corporate governance mechanism rather than information transmission is the main channel through which stock market liberalization reduces litigation risk of the underlying stock firms. This paper emphasizes the unique role and spillover effects of the stock market liberalization, contributing to the literature on law and finance and the literature on the stock market liberalization.

Suggested Citation

  • Zhen Huang & Weiwei Gao, 2021. "Stock market liberalization and firm litigation risk——A quasi-natural experiment based on the Shanghai-Hong Kong Stock Connect policy," Applied Economics, Taylor & Francis Journals, vol. 53(48), pages 5619-5642, October.
    • Handle: RePEc:taf:applec:v:53:y:2021:i:48:p:5619-5642
    DOI: 10.1080/00036846.2021.1927963
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00036846.2021.1927963
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036846.2021.1927963?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xunfa Lu & Zhitao Ye & Kin Keung Lai & Hairong Cui & Xiao Lin, 2022. "Time-Varying Causalities in Prices and Volatilities between the Cross-Listed Stocks in Chinese Mainland and Hong Kong Stock Markets," Mathematics, MDPI, vol. 10(4), pages 1-19, February.
    2. He, Hui & Shi, Wei, 2023. "Enterprise litigation risk and enterprise performance," Finance Research Letters, Elsevier, vol. 55(PA).
    3. Sha, Yezhou & Zhang, Ping & Wang, Yiru & Xu, Yifan, 2022. "Capital market opening and green innovation——Evidence from Shanghai-Hong Kong stock connect and the Shenzhen-Hong Kong stock connect," Energy Economics, Elsevier, vol. 111(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:53:y:2021:i:48:p:5619-5642. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.