Advances in Economics, Management and Political Sciences
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Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
Series Vol. 51 , 01 December 2023
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The Impact of China Economic Policy Uncertainty on CSI 300: An Analysis of the Mediating Effect of Investor Sentiment
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Abstract
This paper explores the mediating effect of investor sentiment on the relationship between China's economic policy uncertainty and the CSI 300 stock market returns. The study employs Principal Component Analysis (PCA) to construct the investor sentiment index, integrating six proxy variables. Additionally, the bootstrap analysis method is utilized to examine whether investor sentiment acts as an intermediary in determining the impact of economic policy uncertainty on stock market performance. The findings reveal that a significant portion (87.0%) of the total effect of economic policy uncertainty on stock returns is mediated through investor sentiment. The study underscores the pivotal role of investor sentiment in financial market behavior and emphasizes the need for policymakers to consider its influence during economic adjustments. Furthermore, it provides crucial recommendations for individual investors, promoting informed and rational decision-making in the dynamic financial landscape.
Keywords
economics policy uncertainty, CSI300, investor sediment, principal component analysis, Bootstrap
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Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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- Volume Title
- Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
- ISBN (Print)
- 978-1-83558-149-0
- ISBN (Online)
- 978-1-83558-150-6
- Published Date
- 01 December 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/51/20230608
- Copyright
- 01 December 2023
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited