Capital Market Liberalization And Tunneling

In the context of economic globalization,the capital markets of countries around the world have been opened.Since the issuance of RMB special stocks(B shares)in 1991,China has been actively exploring a rational capital market opening model to promote stable economic development.In July 2017,the central bank pointed out in the "China Financial Stability Report(2017)" that China will continue to deepen the opening of the capital market.Therefore,the research on the economic consequences of the opening of the capital market has received the same attention from the academic and practical circles.This is because the study of the open model of the capital market not only has theoretical significance,but also helps to provide practical reference value for deepening the reform of the capital market..At present,the relevant research on the opening of the capital market in the academic circles mainly focuses on the macro-level influence.Few literatures pay attention to the impact of the opening of the capital market on the microeconomy.Therefore,how the opening of the capital market affects the micro-economy,whether it has external corporate governance is a topic that needs further discussion.In the context of China's system,the phenomenon of relative concentration of corporate equity is particularly common,and centralized control makes large shareholders have the ability to encroach on the interests of small and medium shareholders,that is,to implement short-selling behavior.Therefore,the problem of the second type of principalagent between the major shareholders and the minority shareholders in China's capital market is more prominent.According to modern corporate governance theory,the strengthening of effective supervision can reduce the short-selling behavior of major shareholders.As the development of China's capital market is still not perfect,the role of market supervision has not been effectively implemented,reducing the cost of implementing short-selling,making large shareholders capable and motivated to implement short-selling behavior.Therefore,it is of positive theoretical and practical significance to study and discuss countermeasures against the more prominent secondclass agency problem in China.As a landmark project of the two-way opening of China's capital market,Shanghai-Hong Kong Stock Connect provides an opportunity to explore the study of the second type of agency problem in the opening of capital market.Specifically,Hong Kong investors have higher maturity,stronger information gathering ability,analytical ability,and awareness of rights protection,and have higher independence,thus improving the company's external governance environment and reducing the company's and investors' The degree of information asymmetry finally suppressed the short-selling behavior of major shareholders.The possible innovations of this paper are:(1)alleviating the endogenous problems faced by this research field.In this paper,with the quasi-natural experiment of the operation of Shanghai-Hong Kong Stock Connect,the double difference method is used to test the governance effect of capital market opening from the perspective of the shortselling behavior of major shareholders,and to establish the causal relationship between the two;(2)A new research perspective was selected.From the perspective of the second type of agency problem,the economic consequences of capital market opening were studied.Based on the theory,the normative analysis was carried out,and the open influence mechanism was discussed.The research in related fields was expanded from a horizontal perspective.The shortcomings of the existing literature;(3)help to provide policy inspiration for the opening of the subsequent capital market,and provide a new perspective for the regulatory layer to build policies related to investor protection.Based on the conclusions,this paper proposes the following policy implications:(1)The regulatory layer can gradually expand the types of targets and purchase limits that foreign investors are allowed to purchase within certain limits;(2)the regulatory layer can try to formulate correspondingly for different types of companies.The regulatory system;(3)The regulatory layer can try to construct an investor protection mechanism from the perspective of capital market opening,and promote the improvement of the capital market system.