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Speculating China economic growth through Hong Kong? Evidence from the stock market IPO and real estate markets

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  • Leung, Charles Ka Yui
  • Tang, Edward Chi Ho

Abstract

This paper argues that since China closes her asset markets, investors turn to Hong Kong instead. The initial public offerings (IPO) of Chinese firms in the Hong Kong stock market and the local housing market of Hong Kong improve the prediction of each other, as they may serve as a coordinator of herds among investors. Alternative explanations such as the “production conjecture” and “underlying factor conjecture” are found to be inconsistent with the data. Our results are also consistent with the increasing importance of Chinese tourists in the world. Directions for future research are also discussed.

Suggested Citation

  • Leung, Charles Ka Yui & Tang, Edward Chi Ho, 2013. "Speculating China economic growth through Hong Kong? Evidence from the stock market IPO and real estate markets," MPRA Paper 46346, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:46346
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    Cited by:

    1. Yin-Wong Cheung & Kenneth K. Chow & Matthew S. Yiu, 2017. "Effects of capital flow on the equity and housing markets in Hong Kong," Pacific Economic Review, Wiley Blackwell, vol. 22(3), pages 332-349, August.
    2. Charles Ka Yui Leung & Joe Cho Yiu Ng & Edward Tang, 2020. "Why is the Hong Kong Housing Market Unaffordable? Some Stylized Facts and Estimations," Globalization Institute Working Papers 380, Federal Reserve Bank of Dallas.
    3. Iou-Ming Wang & Ming Fang & Chiu-Lan Chang, 2015. "Dependence of Real Estate and Equity Markets in China with the Application of Copula," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(12), pages 1258-1266, December.
    4. Shizhen Wang & David Hartzell, 2021. "Real Estate Return in Hong Kong and its Determinants: A Dynamic Gordon Growth Model Analysis," International Real Estate Review, Global Social Science Institute, vol. 24(1), pages 113-138.
    5. Edward C. H. Tang, 2021. "Speculate a lot," Pacific Economic Review, Wiley Blackwell, vol. 26(1), pages 91-109, February.
    6. Terence Tai‐Leung Chong & Alex Wing‐Ho Yiu, 2019. "Nexus between visitor arrivals and residential property rents in Hong Kong," Pacific Economic Review, Wiley Blackwell, vol. 24(3), pages 464-478, August.

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    More about this item

    Keywords

    Animal spirits conjecture; production conjecture; underlying factor conjecture; causality; wealth effect;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General
    • R33 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Nonagricultural and Nonresidential Real Estate Markets

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