How cross-listings from an emerging economy affect the host market?

Qian Sun, Hin Sang Tong, Xin Zhang

Research output: Journal article publicationJournal articleAcademic researchpeer-review

10 Citations (Scopus)


We study the impact of mainland Chinese listings in Hong Kong on the quality and development of the Hong Kong equity market. At the macro-level, we find that the increasing presence of mainland Chinese stocks in Hong Kong increases the size, trading volume, and its link with the China and world markets but reduces the overall volatility of the Hong Kong stock market. At the firm level, the increase affects the market quality, resulting in lower turnover rate, higher Amihud illiquidity ratio, and higher spread for non-mainland Chinese firms. Furthermore, such an increase in presence causes Hong Kong stocks to move in a more synchronized way and reduces these firms investment sensitivity to stock price movement, implying deterioration in the information environment. As a whole, the increasing presence of Chinese companies in Hong Kong brings benefits to the Hong Kong market, yet not without cost.
Original languageEnglish
Pages (from-to)2229-2245
Number of pages17
JournalJournal of Banking and Finance
Issue number7
Publication statusPublished - 1 Jul 2013


  • Cross-listing
  • Hong Kong and China stocks
  • Market quality
  • Price informativeness
  • Synchronicity

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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