Structural Changes in the Chinese Stock Market: A Review of Empirical Research

Lu, Haitian; Fu, Jiajia

doi:10.7603/s40570-014-0006-2

Cited by 9 publications

(6 citation statements)

References 124 publications

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“…State-owned enterprises gradually sell shares to private investors. China's stock market gradually reforms non-tradable shares and issues A share for domestic investors and B share for international investors (Lu and Fu 2014).…”

Section: Literature Reviewmentioning

confidence: 99%

Cross-Section of Returns, Predictors Credibility, and Method Issues

2023

JRFM

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The paper focuses on the relationship between firms’ characteristics and cross-section returns. The author reviews and critically assesses the most recent contributions in the literature. After comparing the abnormal returns (Alpha) and t statistics of the original works with those of replication works, the author concludes that 94 characteristics are robust. The limitation of the paper is that measurement errors in the COMPUSTAT could affect the predictability of cross-section returns. The practical implication of the paper is that the author validates the practice of fundamental analysis. Investors could benefit from those discovered characteristics. The author validates the policy consequence and connects the theoretical frameworks with empirical results. The author evaluates the empirical methodology and proposes several methods to improve future research.

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Section: Literature Reviewmentioning

confidence: 99%

Cross-Section of Returns, Predictors Credibility, and Method Issues

2023

JRFM

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“…The shares held by public investors became freely tradable on the stock market, while the shares held by the state and legal persons were still not tradable. Lu and Fu (2014) describe China's privatization strategy as a two-step approach. The first step is "partial" privatization, which involves SOEs selling a minority stake to public investors which are listed on the stock market, while the majority of stakes are still owned by the State.…”

Section: Simplified Cross-border Payment Procedures-shanghai Ftz Entimentioning

confidence: 99%

China’s structural transformation: reaching potential GDP in the financial services sector

Hsu

Simon

2016

China Financ. and Econ. Rev.

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China's economy faces the daunting challenge of shifting from a manufacturing-based economy to a service-based economy. Reforms in the services sector are slated to continue to take place in the coming years, including in the financial sector. In this paper, we explore China's success and challenges with structural change and then take a closer look at the financial services sector to find out where reforms have occurred, where the potential lies, and what the future will bring. We first describe structural change with regard to growth and TFP (total factor productivity), then as it applies to China. We examine China's financial services sector. Next, we calculate potential GDP of the financial services sector now and with the implementation of expected reforms. We find that, given even conservative estimates, the value added of the financial intermediation sector could double, as labor, capital, technology, and elasticity respond to liberalization policies. Whether potential GDP under reforms is reached is another question; therefore, we recommend that China both increase the pace of implementation, focusing in particular on reducing the oligopoly in the banking sector, increasing investment options by reforming its bond and equity markets, and enhancing innovation in the financial sphere while controlling for risk.

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“…2 The regulatory and economic landscape have led to unique properties of the Chinese A-shares market. For example, the trading being dominated by retail investors, state owned enterprises, frequent stock suspension, lower data consistency due to evolving reporting standards, a large shell value for listed firms, and limited short sale possibilities; see also Lu and Fu (2014). Therefore, a better understanding of the drivers behind Chinese A-shares returns is crucial.…”

Section: Introductionmentioning

confidence: 99%