China's Financial Market Fragmentation, 1978-2004
This paper empirically examines the emergence of financial market fragmentation in China after 1978-reform. It argues that the emergence of financial market fragmentation in China after 1978 is inherent in two salient features of Chinese economic reform, namely, decentralization and gradualism. The low capital mobility between different market segments is largely attributable to the distortions in the financial system generated by the initiatives of local governments. Using provincial loans and deposits data, this paper found that the mobility of financial capital has been actually low across Chinese provinces in the reform period. In addition, financial market fragmentation as assessed by provincial loan-deposit correlation is a new phenomenon emerged since the mid-1980s. Also, the loan-deposit correlation has been significantly influenced by the local fiscal policies and the size of state-owned sector.
|Date of creation:||Dec 2006|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Feldstein, Martin & Horioka, Charles, 1980.
"Domestic Saving and International Capital Flows,"
Royal Economic Society, vol. 90(358), pages 314-29, June.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:8176. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.