IDEAS home Printed from https://ideas.repec.org/a/bla/acctfi/v64y2024i4p3275-3299.html
   My bibliography  Save this article

The capital market consequences of stock market liberalisation: Evidence from Mainland‐Hong Kong Stock Connect Programs in China

Author

Listed:
  • Renhui Fu
  • Fang Gao
  • Yi Zhao

Abstract

We analyse the capital market consequences of stock market liberalisation in a quasi‐natural experiment setting, where Mainland‐Hong Kong Stock Connect Programs allow foreign investors to trade in the Chinese stock market. Utilising difference‐in‐differences estimations, we observe improved stock liquidity, driven by direct liquidity provision and indirect signals to domestic investors. Particularly notable are the effects on eligible stocks without previous exposure to foreign investors, characterised by high corporate transparency and investor protection. The resulting liquidity enhancements reduce equity costs, ultimately elevating firm value. In short, our study highlights the positive influence of stock market liberalisation on the capital market.

Suggested Citation

  • Renhui Fu & Fang Gao & Yi Zhao, 2024. "The capital market consequences of stock market liberalisation: Evidence from Mainland‐Hong Kong Stock Connect Programs in China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 64(4), pages 3275-3299, December.
    • Handle: RePEc:bla:acctfi:v:64:y:2024:i:4:p:3275-3299
    DOI: 10.1111/acfi.13251
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/acfi.13251
    Download Restriction: no
    File URL: https://libkey.io/10.1111/acfi.13251?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
    ---><---

    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:bla:acctfi:v:64:y:2024:i:4:p:3275-3299. 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: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/aaanzea.html .

    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.