Please use this identifier to cite or link to this item:
http://hdl.handle.net/10397/62997
Title: | Foreign ownership restrictions and market segmentation in China's stock markets | Authors: | Chen, GM Lee, BS Rui, O |
Issue Date: | 2001 | Publisher: | Wiley-Blackwell | Source: | Journal of financial research, 2001, v. 24, no. 1, p. 133-156 How to cite? | Journal: | Journal of financial research | Abstract: | We study market segmentation in China's stock markets, in which local firms issue two classes of shares: class A shares available only to Chinese citizens and class B shares available only to foreign citizens. Significant stock price discounts are documented for class B shares. We find that the price difference is primarily due to illiquid B-share markets. Relatively illiquid B-share stocks have a higher expected return and are priced lower to compensate investors for increased trading costs. However, between the two classes of shares, B-share prices tend to move more closely with market fundamentals than do A-share prices. Therefore, we find A-share premiums rather than B-share discounts in China's markets. | URI: | http://hdl.handle.net/10397/62997 | ISSN: | 0270-2592 (print) 1475-6803 (online) |
DOI: | 10.1111/j.1475-6803.2001.tb00822.x |
Appears in Collections: | Journal/Magazine Article |
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