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Impact of China-Pakistan Economic Investment on Volatility of Stock Exchanges in Pakistan and Shanghai
Human Factors in Management and Leadership, Vol. 92, 2023, 49–54
Year (definitive publication)
2023
Language
English
Country
United States of America
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Abstract
This paper aims to analyze the impact of the China-Pakistan Economic Corridor on the
volatility of the Pakistan Stock Exchange and Shanghai Stock Exchanges, namely, to
explore the pre and post-impact China investments in Pakistan in the energy sector on
the stock exchanges of the respective countries. The methods used include an econometric analysis, and univariate statistical analysis, from February 2010 to January 2020.
The results present a significant difference in volatilities of the pre and post-returns of
both indices. Stock prices increased post-CPEC announcement in Pakistan, and there
was a growth in the stock market. However, the mean return post-CPEC announcement
is relatively lower than Pre-announcement tenure, combined with higher volatility. It
shows small investors’ underconfidence. The conclusion is the significant economic
advantages of CPEC to PK.
Acknowledgements
1Universidade Portucalense Infante D. Henrique, Porto, Portugal
Keywords
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