Cover IMF Working Papers
The Internationalization of China’s Equity Markets
Author:
Juan J. Cortina
Search for other papers by Juan J. Cortina in
Current site
Google Scholar
PubMedClose
,
Mr. Maria Soledad Martinez Peria 0000000404811396 https://isni.org/isni/0000000404811396 International Monetary Fund

Search for other papers by Mr. Maria Soledad Martinez Peria in
Current site
Google Scholar
PubMedClose
,
Mr. Sergio L. Schmukler 0000000404811396 https://isni.org/isni/0000000404811396 International Monetary Fund

Search for other papers by Mr. Sergio L. Schmukler in
Current site
Google Scholar
PubMedClose
, and
Jasmine Xiao 0000000404811396 https://isni.org/isni/0000000404811396 International Monetary Fund

Search for other papers by Jasmine Xiao in
Current site
Google Scholar
PubMedClose
Series:
IMF Working Papers
Volume/Issue:
Volume 2023: Issue 026
Language:
English
Publication Date:
10 Feb 2023
DOI:
https://doi.org/10.5089/9798400233876.001
ISBN:
9798400233876
ISSN:
1018-5941
Pages:
62
Keywords:
equity financing; equity market liberalization; firm investment; foreign investors; international investors; issuance activity; Stock Connect; portfolio holding; internationalization process; unconnected firm; China's equity markets; Stock markets; Stocks; Foreign corporations; Emerging and frontier financial markets; Market capitalization; Global
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Download PDF (2.9 MB) Download Epub
China’s equity markets internationalization process started in the early 2000s but accelerated after 2012, when Chinese firms’ shares listed in Shanghai and Shenzhen gradually became available to international investors. This paper studies the effects of the post-2012 internationalization events by comparing the evolution of equity financing and investment activities for: (i) domestic listed firms relative to firms that already had access to international investors and (ii) domestic listed firms that were directly connected to international markets relative to those that were not. The paper finds large increases in financial and investment activities for domestic listed and for connected firms, with significant aggregate effects. The evidence also suggests the rise in firms’ equity issuances was primarily and initially financed by domestic investors. International investors’ portfolio holdings in Chinese equity markets and ownership in firms increased markedly only once Chinese firms’ locally issued shares became part of the MSCI Emerging Markets Index.
  • Collapse
  • Expand
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2023: Issue 026