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Quantifying the Impact of the November 2014 Shanghai-Hong Kong Stock Connect

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  • Richard C. K. Burdekin, Pierre Siklos

    (Wilfrid Laurier University)

Abstract

The November 2014 Shanghai-Hong Kong Stock Connect represented an important step in China’s capital account liberalization, allowing relatively free movement of investor funds between the two markets for the first time. We offer a quantification of the effects of the new program, examining Northbound and Southbound flows of funds over the first two years of the Stock Connect. While controlling for other sentiment and liquidity effects, we test how these flows may have affected the extent of the premium seen for local A-share listings in Shanghai relative to the prices accruing to the same companies in Hong Kong market trading.

Suggested Citation

  • Richard C. K. Burdekin, Pierre Siklos, 2018. "Quantifying the Impact of the November 2014 Shanghai-Hong Kong Stock Connect," LCERPA Working Papers 0110, Laurier Centre for Economic Research and Policy Analysis, revised 30 Jan 2018.
    • Handle: RePEc:wlu:lcerpa:0110
    Note: LCERPA Working Paper No. 2018-4, January 2018.
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    More about this item

    Keywords

    Capital account liberalization; Stock returns; Sentiment; Shanghai; Hong Kong;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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