The Impact of Foreign Ownership on Chinese Stock Liquidity

DOI

10.2991/aebmr.k.220603.089How to use a DOI?

Keywords

foreign ownership; liquidity; adverse selection; competitive effect

Abstract

This paper investigates the relationship between foreign ownership and stock liquidity in China during 2010-2018. We find that foreign ownership has a negative effect on stock liquidity in the main board and SMEs board, while no impact on the GEM board. Foreign investors as informed traders can reduce the stock liquidity due to adverse selection by their counterparties, while they may also increase the stock liquidity due to competitive effect. We find that the negative impact of adverse selection dominates the competitive effect by foreign shareholding.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article distributed under the CC BY-NC 4.0 license.

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TY  - CONF
AU  - Jingyong Wang
AU  - Chujun Zheng
AU  - Qingrong Chen
PY  - 2022
DA  - 2022/07/01
TI  - The Impact of Foreign Ownership on Chinese Stock Liquidity
BT  - Proceedings of the 2022 2nd International Conference on Enterprise Management and Economic Development (ICEMED 2022)
PB  - Atlantis Press
SP  - 557
EP  - 562
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220603.089
DO  - 10.2991/aebmr.k.220603.089
ID  - Wang2022
ER  -