Premium
What if Trading Location Is Different from Business Location? Evidence from the Jardine Group
Author(s) -
Chan Kalok,
Hameed Allaudeen,
Lau Sie Ting
Publication year - 2003
Publication title -
the journal of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 18.151
H-Index - 299
eISSN - 1540-6261
pISSN - 0022-1082
DOI - 10.1111/1540-6261.00564
Subject(s) - relocation , mainland china , currency , business , core (optical fiber) , mainland , china , economics , commerce , monetary economics , financial economics , geography , archaeology , engineering , telecommunications , computer science , programming language
We examine the price behavior and market activity of the Jardine Group companies after they were delisted from Hong Kong in 1994. Although the trading activity of the Jardine Group moved to Singapore, the core businesses remained in Hong Kong and Mainland China. Evidence indicates the Jardine stocks are correlated less (more) with the Hong Kong (Singapore) market after the delisting. This result cannot be explained by various hypotheses, such as relocation of core business, time‐varying betas, migration of trading activity, and currency and tax distortions. We conclude that price fluctuations are affected by country‐specific investor sentiment.