Is the Stock Market Just a Side Show? Evidence from a Structural Reform | Zendy

Murillo Campello | Zendy; Rafael Perez Ribas | Zendy; Albert Y. Wang | Zendy

AI Assistant Blog Pricing

Home ZAIA Blog

Open Access

Is the Stock Market Just a Side Show? Evidence from a Structural Reform

Author(s) -

Murillo Campello,

Rafael Perez Ribas,

Albert Y. Wang

Publication year - 2014

Publication title -

the review of corporate finance studies

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 4.292

H-Index - 14

eISSN - 2046-9136

pISSN - 2046-9128

DOI - 10.1093/rcfs/cfu006

Subject(s) - profitability index , monetary economics , china , business , dividend , stock (firearms) , stock market , capital market , investment (military) , economics , financial system , finance , politics , political science , law , biology , mechanical engineering , paleontology , horse , engineering

The 2005 split-share reform in China mandated the conversion of nontradable stocks into tradable status. This paper examines the effects of stock markets on corporate outcomes exploiting multiple institutional features of the Chinese conversion program. Using a generalized propensity score matching approach, we identify increases in corporate profitability, investment, value, and productivity as a result of the reform. We also identify changes in firms’ likelihood to issue shares and engage in mergers, as well as changes in dividend and capital structure policies. Our findings provide insights on the role of stock markets in shaping corporate activity and on the impact of regulation on economic growth

The content you want is available to Zendy users.

Already have an account? Click here to sign in.

Having issues? You can contact us here

Accelerating Research