Does Chinese-style margin trading promote the high-quality development of listed companies?

ABSTRACT: Using the margin trading reform of China's stock market as a quasinatural experiment, this paper explores whether margin trading promotes the high-quality development of listed companies. The results show that total factor productivity (TFP) significantly decreases after listed companies are included in the underlying stocks of margin trading. In addition, the negative impacts are stronger for listed companies with higher financial leverage, lower cash asset holdings, lower shareholdings of financial institution investors, and less attention from securities analysts. Further research shows that the negative impacts of margin trading on TFP are closely related to the deterioration of the information environment and the tightening of financing constraints. When listed companies are included

SUBMITTER: Tang J 

PROVIDER: S-EPMC10138208 | biostudies-literature | 2023

REPOSITORIES: biostudies-literature