This paper investigates the Chinese mainland Stock Exchanges and their following interconnecting features: savers’ attitude towards stock investments, investors’ trading behaviour and stock returns explanations. We evaluate the effectiveness of the recent efforts made by the Chinese authorities to improve the level of legal protections for shareholders and the opening-up of the Chinese Stock Markets to foreign investors. The whole analysis is carried out through a system of simultaneous equations. The main results are that Chinese shareholders and stock markets are mostly driven by emotional behaviour. Stock market returns are barely influenced by the overall Chinese economic booming, but reveal the presence of speculative influences. Investors’ behaviour, as well as general trading activities, hardly seems to be affected by the legal framework introduced by the national Authorities.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
7034.
Length: Date of creation: 01 Nov 2007 Date of revision: Publication status: Published in Journal of Business and Policy Research 2.3(2007): pp. 64-82 Handle: RePEc:pra:mprapa:7034
Find related papers by JEL classification: F30 - International Economics - - International Finance - - - General G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
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