Title

The credibility of the PRC commitment to a market economy in Hong Kong : hypotheses and evidence

Document Type

Journal article

Source Publication

Economics and Politics

Publication Date

11-1-1997

Volume

9

Issue

3

First Page

251

Last Page

280

Abstract

How credible is China's commitment to a market economy in Hong Kong after 1997? Events signaling changes in commitment and the movement of time closer to 1997 should reduce the relative prices of immobile assets if commitment is not fully credible. Several factors may offset these effects: anticipatory adaption, growing dependence on China-related trade, and Chinese investment in Hong Kong. Analysis of data on incorporation and investment decisions, the relative sensitivity of the stock prices of firms with different asset mobility to political events, and the market for office space most strongly support hypotheses about credibility, adaption, and demand augmentation.

DOI

10.1111/1468-0343.00033

Print ISSN

09541985

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