The Stock Connect to China

11 Pages Posted: 30 Jan 2023 Last revised: 30 May 2024

See all articles by Zhiguo He

Zhiguo He

Stanford University - Knight Management Center

Yuehan Wang

Central University of Finance and Economics

Xiaoquan Zhu

University of International Business and Economics - School of Banking and Finance

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Date Written: January 2023

Abstract

As a bridge between Chinese mainland and international financial markets, the Stock Connect program allows investors on both sides to gain mutual access. By analyzing how cross-border flows respond to macro-related shocks, we show that compared with possibly homemade foreign investors, genuine foreign investors are more likely affected by the U.S. monetary shocks, the exchange rate risk, the U.S. market performance as well as the cross-market valuation disparity. The paper highlights the importance of profiling different groups of cross-border participants over market integration.

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Suggested Citation

He, Zhiguo and Wang, Yuehan and Zhu, Xiaoquan, The Stock Connect to China (January 2023). NBER Working Paper No. w30893, Available at SSRN: https://ssrn.com/abstract=4342392

Zhiguo He (Contact Author)

Stanford University - Knight Management Center ( email )

655 Knight Way
Stanford, CA 94305-7298
United States

Yuehan Wang

Central University of Finance and Economics ( email )

770 Middle Road
Dresden, ME 04342
United States

Xiaoquan Zhu

University of International Business and Economics - School of Banking and Finance ( email )

China

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