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Licensed Unlicensed Requires Authentication Published by De Gruyter January 5, 2019

Population Policy, Demographic Change, and Firm Returns: Evidence from China

  • Zhiyong An EMAIL logo and Yilin Hou


We take advantage of China’s relaxation in January 2014 of its “one-child” family planning policy to study the causal relationship between expected future demographic changes and firms’ stock returns. We use an event study method as our identification strategy and employ data from Chinese stock markets to implement the analysis. We find consistent evidence suggesting that expected demographic changes exert statistically and economically significant effects on firms’ stock returns. We address four potential threats about the validity of our empirical design and argue that our conclusion is not China-specific, but a generic lesson portable to developed countries.

JEL Classification: D22; G18; J11; J12; L60


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The views expressed herein are those of the authors and do not necessarily reflect the views of Fannie Mae or its management. The authors thank Alan J. Auerbach, Stefano Dellavigna, James M. Poterba, Feila Zhang, and anonymous reviewers for helpful comments.

Published Online: 2019-01-05

© 2019 Walter de Gruyter GmbH, Berlin/Boston

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