
Control on supply of shares, demand curves and the reaction of stock price——Based on the data of Chinext
SUN Hui-xia, SU Jun, HE Jia
Systems Engineering - Theory & Practice ›› 2013, Vol. 33 ›› Issue (1) : 1-11.
Control on supply of shares, demand curves and the reaction of stock price——Based on the data of Chinext
Does the supply of shares affect stock price? It is an important problem not only for investors but also for the financial regulators. Stock supply could affect stock price only when there was a downward-sloping demand curves theoretically. Therefore, an empirical test on the elasticity of stock demand curves is necessary. Based on the institutional bidding data in detail during period of IPO book building, our research shows that demand curve is downward-sloping both on primary market and secondary market, which means that supply of shares will have an effect on the stock price. Therefore, the supply and demand of shares should be taken into account when financial regulators making policies and investors making investment decisions.
supply of shares / demand curves of IPO shares / elasticity of demand curves / reaction of stock price {{custom_keyword}} /
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