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Effects of capital flow on the equity and housing markets in Hong Kong
Author(s) -
Cheung YinWong,
Chow Kenneth K.,
Yiu Matthew S.
Publication year - 2017
Publication title -
pacific economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.34
H-Index - 33
eISSN - 1468-0106
pISSN - 1361-374X
DOI - 10.1111/1468-0106.12233
Subject(s) - capital flows , economics , equity capital markets , equity (law) , capital (architecture) , financial capital , financial crisis , monetary economics , emerging markets , macroeconomics , finance , market economy , private equity , political science , human capital , liberalization , archaeology , law , history
The revival of strong capital flows to emerging economies following the global financial crisis in 2008–2009 has rekindled the debate on effects of excessive capital inflows. We study the effects of official and illicit capital flows on Hong Kong, which is a small and open economy with minimal restrictions on cross‐border fund movements. It is found that the official and illicit capital flow measures display a low level of comovement and exhibit differential effects on Hong Kong's equity and residential housing markets. The results highlight the complexity of managing capital flows, and the relevance of sector‐specific capital management policies.