IDEAS home Printed from https://ideas.repec.org/a/now/jnlcfr/104.00000140.html
   My bibliography  Save this article

Demand Curves for Stocks Slope Down in the Long Run: Evidence from the Chinese Split-Share Structure Reform

Author

Listed:
  • Clark Liu
  • Baolian Wang

Abstract

This paper uses China’s Split-Share Structure Reform to study the slope of long-term demand curves. The reform increased local A-share float but did not affect foreign B-share float. Across firms, larger increases in A-share float lead to larger decreases in A-share price relative to B-share price, even up to around 10 years after the reform, suggesting that demand curves slope down in the long run. Larger increases in float also lead to larger decreases in turnover and volatility, and demand curves are steeper when the divergence of opinion is greater, consistent with the theory modeling investors with heterogeneous beliefs.

Suggested Citation

  • Clark Liu & Baolian Wang, 2024. "Demand Curves for Stocks Slope Down in the Long Run: Evidence from the Chinese Split-Share Structure Reform," Critical Finance Review, now publishers, vol. 13(1-2), pages 225-264, February.
  • Handle: RePEc:now:jnlcfr:104.00000140
    DOI: 10.1561/104.00000140
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1561/104.00000140
    Download Restriction: no

    File URL: https://libkey.io/10.1561/104.00000140?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:now:jnlcfr:104.00000140. 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: Lucy Wiseman (email available below). General contact details of provider: http://www.nowpublishers.com/ .

    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.