Effects of Cross-boundary Stock Trading on Tunneling: Evidence from China

UM > Faculty of Business Administration > DEPARTMENT OF FINANCE AND BUSINESS ECONOMICS

Status	已發表Published
	Effects of Cross-boundary Stock Trading on Tunneling: Evidence from China
	Lei, C. H.; Chen, S.; Law, K. F.
	2021-05-01
Source Publication	The 37th International Conference of the French Finance Association (AFFI)
Abstract	Chinese government introduces a series of programs to liberalize its stock market during the past three decades. One of the well-known programs is the Stock Connect program. This paper examines the influence of this cross-boundary stock trading program on major shareholders’ tunneling activities. We find that the tunneling activities of China’s listed firms are reduced after joining the program. This negative relationship remains strong for non-cross-listed companies and isstrengthened for cross-listed companies. Regarding corporate natures, we find that the tunneling activities of family-owned companies are restrained obviously after joining the program, but the tunneling activities of state-owned enterprises are less affected by the program. We further find that the reduction of tunneling is more pronounced for firms with a smaller control-ownership wedge. Our result demonstrates robustness when we conduct various robustness checks, including the propensity score matching technique, changing the measurement of tunneling activities, and placebo test.
Keyword	Liberalization Stock connect Tunneling Corporate governance
Language	英語English
The Source to Article	PB_Publication
PUB ID	60087
Document Type	Conference paper
Collection	DEPARTMENT OF FINANCE AND BUSINESS ECONOMICS
Corresponding Author	Lei, C. H.
Recommended Citation GB/T 7714	Lei, C. H.,Chen, S.,Law, K. F.. Effects of Cross-boundary Stock Trading on Tunneling: Evidence from China[C], 2021.
APA	Lei, C. H.., Chen, S.., & Law, K. F. (2021). Effects of Cross-boundary Stock Trading on Tunneling: Evidence from China. The 37th International Conference of the French Finance Association (AFFI).

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