Investors’ behaviour in the Chinese Stock Exchanges: Empirical Evidence in a Systemic Approach

Lucarelli, Caterina and Palomba, Giulio (2007): Investors’ behaviour in the Chinese Stock Exchanges: Empirical Evidence in a Systemic Approach. Published in: Journal of Business and Policy Research , Vol. 3, No. 2 (November 2007): pp. 64-82.

Abstract

This paper investigates the Chinese mainland Stock Exchanges and their following interconnecting features: savers’ attitude towards stock investments, investors’ trading behaviour and stock returns explanations. We evaluate the effectiveness of the recent efforts made by the Chinese authorities to improve the level of legal protections for shareholders and the opening-up of the Chinese Stock Markets to foreign investors. The whole analysis is carried out through a system of simultaneous equations. The main results are that Chinese shareholders and stock markets are mostly driven by emotional behaviour. Stock market returns are barely influenced by the overall Chinese economic booming, but reveal the presence of speculative influences. Investors’ behaviour, as well as general trading activities, hardly seems to be affected by the legal framework introduced by the national Authorities.

• Item Type: MPRA Paper
• Language: English
• Keywords: Chinese Stock Exchanges, shareholders’ rights, corporate governance, investors’ behaviour, system of simultaneous equations
• Subjects: F - International Economics > F3 - International Finance > F30 - General; G - Financial Economics > G1 - General Financial Markets > G18 - Government Policy and Regulation; C - Mathematical and Quantitative Methods > C3 - Econometric Methods: Multiple; Simultaneous Equation Models; Multiple Variables; Endogenous Regressors > C30 - General

References

C. Lucarelli and G. Palomba

Investors’ behaviour in the Chinese Stock Exchanges: Empirical Evidence in a Systemic Approach

Journal of Business and Policy Research

vol. 3, No. 2

Nov.-Dec. 2007

pp. 64-82