Topic: Dissecting the Long-term Performance of the Chinese Stock Market

Speaker: Franklin Allen, Professor of Finance and Economics, Imperial College London

Time: 4:00pm-5:30pm, September 21 (Beijing Time)

Location: 4-101

Abstract:

Domestically listed Chinese (A share) firms have lower stock returns than externally listed Chinese, developed and emerging country firms during 2000-2018. They also have lower net cash flows than matched unlisted Chinese firms. The underperformance in both stock and accounting returns is more pronounced for large A share firms. Investor sentiment, a proxy for behavioral biases, can explain low stock returns in the cross-country and within A share samples. Institutional deficiencies in IPO and delisting processes, and especially weak corporate governance in terms of shareholder value creation, are consistent with the underperformance in stock returns and net cash flows. 

About the speaker:

Franklin Allen is Professor of Finance and Economics and Director of the Brevan Howard Centre at Imperial College London and has held these positions since July 2014. In August 2019 he became the Associate Dean for Faculty and Research in the Business School and in August 2020 the Vice-Dean (Research & Faculty) there. He was on the faculty of the Wharton School of the University of Pennsylvania from September 1980 – June 2016. He now has Emeritus status there. He was formerly Vice Dean and Director of Wharton Doctoral Programs, Co-Director of the Wharton Financial Institutions Center, Executive Editor of the Review of Financial Studies and Managing Editor of the Review of Finance. He is a past President of the American Finance Association, the Western Finance Association, the Society for Financial Studies, the Financial Intermediation Research Society and the Financial Management Association, and a Fellow of the Econometric Society and the British Academy. He received his doctorate from Oxford University. Dr. Allen's main areas of interest are corporate finance, asset pricing, financial innovation, comparative financial systems, and financial crises. He is a co-author with Richard Brealey and Stewart Myers of the eighth through thirteenth editions and with Alex Edmans as well of the fourteenth edition of the textbook Principles of Corporate Finance.