Regulatory Shock and Regulatory Cycle in China’s Stock Market
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| Title | Regulatory Shock and Regulatory Cycle in China’s Stock Market
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| Author | Zhao Jingmei, Cao Hong and Wu Fengyun |
| Organization | School of Finance, Southwestern University of Finance and Economics;Research Institute of Economics and Management, Southwestern University of Finance and Economics |
| Email | jingmei600163@163.com；caohong.swufe@gmail.com |
| Key Words | Regulatory Shock; Regulatory Cycle; Macroeconomic Factors; Monetary Factors; Policy Market |
| Abstract | This paper studies the regulatory shock on China’s stock market and makes its efforts to pioneer the issue of “regulatory cycle”. Our research indicates: 1. In the short run, stiffer punishment on enterprises and individuals and more publishing of regulations would boost stock prices while in the long run the effect tends to be suppressive; the enlargement of stock supply by the regulators has evident restraining effect on stock prices. 2. When enforcing regulations, the regulators rarely take care of market fluctuations except when approving new IPOs. Market performance has an evident impact on IPO approvals. 3. A regulatory cycle exists in China’s stock market. One cycle lasts averagely 11 months. The regulatory cycles fluctuates more frequently than stock market cycles and usually leads the stock market cycle for three months. |
| Serial Number | WP166 |
| Time | 2012-02-14 |
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