Graduation Year


Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Richard Burdekin

Reader 2

Sean Flynn

Rights Information

2019 Zhicong Hu


This research asks the question that whether the Stock Exchange of Hong Kong is losing its economic independence with regards to the rising of the mainland economy, represented by Shanghai, and the growing political tension within. To answer this question, this research takes the approach of analyzing the possible influences that the Shanghai Stock Exchange could have on the Stock Exchange of Hong Kong using regression analysis. The monthly trade volume and market capitalization of both stock markets from July 1996 and January 2019 are used as dependent variables to analyze the possible influences. The New York Stock Exchange data are also included as a control for possible third-party influences. Other control variables including the output level, monetary supply, and liquidity, employed to control for outside effects. The empirical analysis suggests that the Shanghai Stock Exchange has an increasing influence on the Stock Exchange of Hong Kong over time but not due to the integration of the Shanghai Stock Exchange to the world economy. Because the Shanghai Stock Exchange has an inverse relationship with the New York Stock Exchange regardless of the statistical significance. Besides, data from pre-1940s are also included as a part of this research for the purpose of analyzing the integration of China markets before the China Communist Party took over the power and shut down the Shanghai Stock Exchange.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.