Abstract
We explore factors that contribute to A-share premiums (ASPs) using a sample of 94 cross-listed Chinese firms. We construct proxies of individual investors' propensity to speculate to investigate the association between the speculative motivation and the ASP. This study finds results that are consistent with predictions of behavioral finance theory: When individual investors speculate on a clientele of A-shares, which are characterized by costly to arbitrage or whose issuing firms are attractive to speculative picks, this clientele of A-shares enjoys persistent higher ASPs than other cross-listed A-shares. This finding is robust after controlling for relevant factors reported by previous studies.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.