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The Effect of the China Connect

Publish Time:2021-12-06

讲座时间:2021年12月15日  10:00- 11:30am




We analyze the effects on Chinese firms of the ``China Connect equity market liberalization. Because China is a capital abundant country, unlike the typical emerging market examined in the literature, the expected benefits and costs of liberalization may logically be different. Nonetheless, the liberalization brought benefits in the form of lower funding costs, higher stock prices, and more investment for connected firms compared to unconnected firms, despite a common negative effect on all Chinese firms from capital outflows. However, these benefits come from a new channel: reducing domestic credit misallocation between private- and state-owned enterprises. We also document costs of liberalization in that connected firms became more sensitive to external shocks than unconnected firms.


Sili ZHOU currently serves as Assistant Professor of Finance at the Fanhai International School of Finance(FISF) and School of Economics(SOE), Fudan University in Shanghai.

Professor Zhou's research interests include innovation, corporate finance, market microstructure and Chinese financial markets. His research has been published in leading academic journals including Journal of Corporate Finance, Emerging Markets Review, Pacific-Basin Finance Journal, etc. His research is also widely featured in Wall Street Journal, UNIDO, Covid Economics, VoxChina, Fed, BOFIT etc.

Professor Zhou obtained his Ph.D. degree in Business (Finance) from at Lee Kong Chian School of Business of Singapore Management University (SMU) in 2017, M.A. in Economics from Shanghai University of Finance and Economics in 2013 and B.A. in Economics from Zhongnan University of Economics and B.S. in Computer Science from Huazhong University of Science and Technology in 2011.