TY - JOUR
T1 - The Whack-a-Mole Game
T2 - Tobin Taxes and Trading Frenzy
AU - Cai, Jinghan
AU - He, Jibao
AU - Jiang, Wenxi
AU - Xiong, Wei
N1 - Publisher Copyright:
© 2020 The Author(s) 2020. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For permissions, please e-mail: [email protected].
PY - 2021/12/1
Y1 - 2021/12/1
N2 - To dampen trading frenzy in the stock market, the Chinese government tripled the stamp tax for stock trading on May 30, 2007. The greatly increased trading cost triggered a migration of the trading frenzy from the stock market to the warrant market, which was not subject to the stamp tax. This migration exacerbated a price bubble in the warrant market. Our analysis of investor account data uncovers not only large inflows of new investors to the warrant market but also greatly intensified trading by existing warrant investors. This episode exemplifies the so-called "whack-a-mole"game in financial regulations.
AB - To dampen trading frenzy in the stock market, the Chinese government tripled the stamp tax for stock trading on May 30, 2007. The greatly increased trading cost triggered a migration of the trading frenzy from the stock market to the warrant market, which was not subject to the stamp tax. This migration exacerbated a price bubble in the warrant market. Our analysis of investor account data uncovers not only large inflows of new investors to the warrant market but also greatly intensified trading by existing warrant investors. This episode exemplifies the so-called "whack-a-mole"game in financial regulations.
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U2 - 10.1093/rfs/hhaa135
DO - 10.1093/rfs/hhaa135
M3 - Article
AN - SCOPUS:85121248970
SN - 0893-9454
VL - 34
SP - 5723
EP - 5755
JO - Review of Financial Studies
JF - Review of Financial Studies
IS - 12
ER -