Capital Market In China Research Articles

Analysis of the Impact of Investor Sentiment on IPO Underpricing: Perspective from GEM Manufacturing Firms

The IPO phenomenon is a hot issue based on the financial field of listed companies. China has the phenomenon of IPO underpricing, and the underpricing of new shares in China is much higher than that in other countries. Unlike western countries, China's financial repression phenomenon is stronger, the financial environment is special, and there are more retail investors in China's stock market, which are more obviously influenced by emotions and have a strong herd mentality. IPO underpricing has more negative impact on China's capital market. This paper analyzes the reasons for investors' emotional frenzy on the first day closing price of GEM new shares listed from the perspective of behavioral finance. From the perspective of investor sentiment, this paper selects the proxy variables of investor sentiment in different levels of markets and uses multiple regression method to study the impact of investor sentiment on IPO underpricing. It is found that the winning rate is adversely connected with IPO underpricing, while turnover rate is positively correlated with it, and corresponding policy suggestions are put forward. The results in this paper benefit certain investors in the financial market.

The Research on the Relation between Accountancy Firm’s Expertise and IPO Approval —— Empirical Studies based on SSE STAR Market

The registration system reform with information disclosure as the core is a major institutional innovation in China's capital market in recent years. Compared with the "government-led" approval system, the pilot registration-based review system for the Science and Technology Innovation Board is characterized by "market-led, government-supervised”. In this context, how to better play the role of intermediaries and realize the benign interaction of "gatekeeper" supervision to protect the interests of investors is an important issue. An empirical analysis is made on IPO approval and IPO time used using the measurement of accountancy firm expertise model. The results of both models show that accountancy firm expertise have no significant impact on IPO approval and IPO time used, by contrast, ROA and have significant impact on IPO approval and IPO time used, that is to say, it depends more on the financial situation of the enterprise to influence the IPO approval and IPO time used of the enterprise.

An Empirical Research on the Impact of Dividend Policy Disclosure on Company Stock Price

This thesis uses the event study method and takes the A and B shares of the manufacturing industry in Shanghai and Shenzhen stock markets in 2019 as the research samples, and uses the market model to study the impact of the disclosure of cash dividend, mixed dividend and non-dividend policy on the stock price of the company. Study found that the announcement of the cash dividend policy did not cause the significant increase or decrease of stock prices. China's unique "semi-mandatory dividend policy" makes information conveyed by the disclosure of domestic cash dividend policy is different from the western scholars research and have it’s own new connotation. The "semi-mandatory dividend policy" makes it more difficult for investors to interpret the message of dividend policy and make rational decisions. At the same time，it also makes the market reaction of dividend policy more complicated in the further study. The announcement of mixed dividend policy and non-dividend policy caused a significant rise in stock prices. The CAR (-2, 2) of the companies’ stock with non-dividend policy have the highest average. The results show that China's capital market is more keen on stock speculation. The "speculation" and "arbitrage" behavior of institutional or individual investors on stocks will have a certain impact on the stock price after the announcement of dividend policy. Based on the relevant conclusions of the empirical study and combined with China's relevant policies, his thesis makes an in-depth analysis of the reasons why the disclosure of cash dividend, mixed dividend and non-dividend policy affects the stock price.

A model for measuring over-financialization: Evidence from Chinese companies

This study develops a model of measuring over-financialization. We use a novel approach for modeling over-financialization when the actual financialization degree is over the target level. We test this model using data from the capital market of China. The findings are: (1) theoretically, our model can accurately distinguish over-finanialization from financialization of listed companies; (2) empirically, we analyze the company characteristics that affect over-financialization. We find that (a) state-owned enterprises tend to restrain from over-financialization; (b) the size of enterprises has a significant negative correlation with over-financialization; (c) there are significant differences in corporate over-financialization across different regions.

Research on Standardizing and Guiding the Healthy Development of Chinese Capital According to Law

This paper starts from the perspective of improving the management system of China's bond market, takes the steady promotion of the management reform of local government special bonds as the foothold, and provides some suggestions for improving the basic system of China's capital market and better regulating and guiding capital development.

Identification of Financial Fraud in Listed Companies and Analysis of Preventive Measures - A Case Study of Kangmei Pharmaceutical

In recent years, China's capital market has continued to develop. However, some companies are still fabricating business facts in pursuit of illegal interests, resulting in more and more common financial fraud under the new "Securities Law". Therefore, this paper takes Kangmei Pharmaceutical as the research object, and sorts out the cases of corporate financial fraud as a whole. The inventory and monetary funds are used to analyze its counterfeiting methods. Subsequently, risk factor theory is used to analyze the fraud motivation of Kangmei Pharmaceutical. In general, this paper puts forward suggestions on the prevention and management of financial fraud for listed companies in my country, which provides necessary guarantees for maintaining the market environment and strengthening corporate supervision.

Economic policy uncertainty and corporate investment efficiency: Evidence from China - Based on panel data

This paper studies the impact of economic policy uncertainty on corporate investment efficiency. The study finds that economic policy uncertainty has a significantly positive impact on corporate investment efficiency. In addition, the positive relationship is still robust after conducting a series of robustness checks. Further analyses show that the impact of economic policy uncertainty on corporate investment efficiency is more pronounced in firms that do not employ Big 4 auditors, are non-state-owned, and have fewer analysts. By exploring the economic channel, this study shows that economic policy uncertainty is related to higher information disclosure quality. Firms with higher information disclosure quality tend to improve their corporate investment efficiency when economic policy uncertainty increases. Findings show that the increase in economic policy uncertainty in China's capital market can improve corporate information disclosure quality and further improve corporate investment efficiency.

Asset Price Bubble under Behaviroral Finance Theory: Based on Log-Periodic Power Law Model

The asset price bubble problem is not only the most concerned topic in the financial circle, but also one of the most important research topics in the financial circle. In history, every time asset prices skyrocketed, bubbles were accumulated, and every asset price crash resulted in a massive shrinking of wealth, bankruptcy of enterprises, and economic recession. This paper is based on the theory of investor behavioral bias in behavioral finance theory, and is based on the log-periodic power law (LPPL) theory of iron ore futures, apple futures, coke futures and stock market indices that is widely used in Chinese financial markets. The market index and bitcoin price are empirically analyzed through the process of bubble accumulation, and the stock market index of China's stock market and the index of China's capital market are predicted and analyzed based on LPPL theory.

Research on Institutional Investors and Executive Compensation Stickiness Based on Fixed Effect Model: A Case Study of Chinese Listed Companies

Based on the relevant data of Chinese A-share listed companies from 2014 to 2018, this paper studies the relationship between institutional investors and executive compensation stickiness by using Excel and Stata15.0 software. By fixed effect model, the results show that the sensitivity of executive compensation to performance of listed companies in China is asymmetric, which means there is a sticky characteristic of executive compensation. With the continuous development of China capital market, institutional investors will significantly inhibit the stickiness of executive compensation; in addition, according to the degree of pressure sensitivity, institutional investors can be divided into bias-pressure-resistant institutional investors and bias-pressure-sensitive institutional investors, and the former has a stronger inhibition effect on executive compensation stickiness than the latter. Therefore, the participation of institutional investors can optimize the executive compensation system, thus further promoting the implementation of contract theory and the development of enterprises.

The Impact of Multi-Level Capital Markets on The Business Transformation of Small and Medium-Sized Investment Banks Under the Beijing Stock Exchange Policy

The Beijing Stock Exchange (BSE) was incorporated on 3 September 2021 as the first corporate stock exchange in China, approved by the State Council and supervised by the China Securities Regulatory Commission. The BSE is designed to serve innovative small and medium-sized enterprises (SMEs), especially the "specialized and new" small giants, and to develop and interconnect with the Shanghai and Shenzhen Stock Exchanges and regional equity markets to form an institutional arrangement that suits the characteristics of SMEs and to explore the path of financial inclusion through capital market support for technological innovation of SMEs. Building a multi-level capital market so as to better serve the real economy is an important goal in the construction of China's capital market, and the establishment of the BSE is an important milestone. In the future, how small and medium-sized brokerage firms will make use of the policy opening brought by the BSE to strengthen the expansion of the corresponding business segments has become a key research direction. This paper will focus on the construction of China's multi-level capital market, compare it with the establishment of the US capital market, study the development path of China's capital market, and thus analyse the transformation path of Chinese small and medium-sized brokerage firms to seize the opportunities of the times.

ESG Rating and Northbound Capital Shareholding Preferences: Evidence from China

In the context of achieving carbon peak and carbon neutrality goals and the opening of a capital market in China, an emerging country, the relationship between an ESG rating and northbound capital shareholding preferences (NCSP) is a topic worthy of discussion. In this research, we selected CSI 300-listed companies from 2015 to 2020 as the research object and examined the influence and mechanism of the ESG rating on the NCSP. Our findings showed that the ESG rating is significantly correlated with NCSP, that the ESG rating can dramatically enhance corporate accounting conservatism, and that accounting conservatism has a partial mediating effect between an ESG rating and the NCSP. Furthermore, we noticed that the positive effect of ESG ratings on NCSP among non-state (non-SOE) corporations is more pronounced. The most prominent of the three perspectives of ESG ratings was governance (G). We found that the ESG rating had a stronger impact on the NCSP during the post-COVID-19 period than in the pre-COVID-19 period. In this paper, based on the perspective of accounting conservatism, we enrich the study of ESG ratings in the capital market, provide empirical evidence for the theoretical study of NCSP, and offer a reference for the optimization of the ESG concept and its positioning in corporations. In future studies, expanding the sample range may lead to different interesting findings.

Market misvaluation and corporate innovation: “Catering” or “risk aversion”?—Empirical evidence from China capital market

This paper tests how market misvaluation affects corporate innovation. Unlike the “catering effect” observed in the US, we find that estimated stock overvaluation in China is strongly negatively associated with corporate innovation, conforming to our “risk-aversion” hypothesis. In China, misvaluation affects innovation via finance and management behavior channels. The effect is more significant in non-state-owned corporations than in state-owned corporations. Stock turnover rate and ownership concentration play moderating roles in the effect. The evidence sheds light on the relationship between market risks and corporate innovation in an emerging market.

The impact of COVID-19 epidemic on Chinese stock market: based on the capital asset pricing model and Fama-French Three-Factor Model

According to macroeconomic theory, most investors usually focus on two factors when making investments: one is investment income, and the other is investment risk. In the research on the trade-off between risk and return, CAPM (capital asset pricing model) and Fama-French three-factor model are one of the representative research results in the history of financial development. This article will use these two models to analyse China's A-share market before and after the epidemic, and then study the impact of COVID-19 on China's capital market

Stock Price Crash Risk and Financing Constraints: An Explanation Based on the Moderate Effect of Corporate Performance

The stock price crash risk and financing constraints are the focus of current social concerns, and the moderating effect of corporate performance on them has also been focused. This paper uses the data of China's A-share listed companies in 2018 to study the interaction mechanism and relationship among corporate performance, the stock price crash risk and financing constraints. The results show that the stock price crash risk significantly increases the degree of financing constraints, and good corporation performance reduces the increasing effect of stock price crash risk on financing constraints. Further robustness test shows that this conclusion holds for all enterprises of different ownership, and is more obvious for enterprises of larger size. The research conclusions not only enrich the literature on corporate performance, financing constraints and stock price crash risk, but also have important referenced value for reducing the stock price crash risk. Additionally, it promotes the healthy and stable development of China's capital market.

A Case Study of Financial Fraud in Listed Companies

With the continuous development of China's capital market, the deepening of the system reform, the national economy has achieved rapid development, but behind the prosperity of the market economy, some problems also arise; Some enterprises do not follow the financial accounting reporting standards, consciously use a variety of means to distort the reflection of business activities, making accounting information distortion, misleading information users' decisions. The frequent occurrence of financial fraud not only causes serious losses of investors' interests, but also causes a huge impact on the capital market, which undoubtedly hinders the development of China's national economy and is not conducive to the economic development of human society. Therefore, in this context, the analysis and research of financial fraud cases is particularly important. Based on the typical cases of financial fraud in the past two years, kunming machine tool as an example, the review case background, reveal its financial fraud means, based on business ethics and accounting professional ethics Angle, analysis of fraud motivation, and puts forward feasible financial fraud prevention suggestion and strategy, in order to promote the healthy development of capital market in China.

Do Female CFOs Reduce Disclosure Violations in Listed Companies? Empirical evidence from China's capital market

Abstract This paper selects the data of China's listed companies from 2007 to 2016 as the sample and uses the binary logit regression method to explore whether the gender of the CFO has an impact on the company's information disclosure violations. The results show that female CFOs significantly reduce the probability and number of information disclosure violations of listed companies, and the stronger their own ability, female CFOs have a significant incremental impact on restraining information disclosure violations of listed companies. The research conclusion provides a reference for enterprises to select and hire CFOs. JEL classification numbers: G34, M4. Keywords: CFO, Female executives, Violation of information disclosure.

Driving factors behind the development of China's green bond market

Green bonds have developed rapidly, over a short period, in China's capital market, making it the world's largest green bond market. However, there is little empirical literature on China's green bond market growth drivers. This paper uses structural equation models to explain the driving factors and mechanism of the top-down development model of China's green bond market. The findings indicate that the local economy and environmental governance impacts growth more in the green bond market, followed by the institutional environment. In contrast, policy support impacts were small and statistically insignificant. Meanwhile, the effects of the local economy and environmental governance are direct, and the institutional environment indirectly promotes economic development. These results suggest that the local economy and institutional and environmental governance are the main driving factors for China's green bond market's rapid development and the reasons for unbalanced regional distribution. Overall, the findings have practical implications for further promoting the coordinated development of the green bond market and building a green financial system.

Research on the Present Situation and Countermeasures of Accounting Information Supervision of Listed Companies in China

With the rapid expansion of the scale of China's capital market, the disclosure of accounting information of listed companies is not standardized and the problem of information transparency is becoming more and more prominent. This paper analyzes the present situation and existing problems of the accounting information supervision system of listed companies in China from three aspects: the internal system supervision of listed companies, the supervision of government legal system and the supervision of social intermediary system, and puts forward some countermeasures for perfecting the supervision of accounting information of listed companies in China.

Corporate Financing Constraints and Stock Price Crash Risk based on Overinvestment Perspective

As an anomaly in the capital market, the frequent occurrence of domestic and foreign stock price crashes can bring great impact on the stability of the market and economic development. The causes have also become an important topic of research for scholars, and this paper uses data of A-share listed companies of China in 2018 to study the impact of financing constraints on the risk of stock price crashes. The results show that the degree of financing constraints is significantly and negatively related to the risk of stock price collapse, i.e., the higher the degree of financing constraints, the lower the risk of stock price collapse. The findings can not only enrich the literature on stock price crash risk, financing constraints and other related fields, but also have important reference value for reducing stock price crash risk and promoting the healthy and stable development of China's capital market.

The Impact of COVID-19 on China's Capital Market and Major Industry Sectors.

This paper studies the impact of COVID-19 on China’s capital market and major industry sectors via an improved ICSS algorithm, a time series model with exogenous variables and nonparametric conditional probability estimation. Through the empirical analysis of the stock market, the bond market and different industry sectors, it is found that the pandemic has had no significant impact on the return of the stock and bond markets; however, it has increased market volatility. There are significant differences in the significance, direction and duration of the impact of the pandemic in different sectors. In addition, the impacts of COVID-19 have been gradual in some industries but rapid in others. Different industries show different sensitivities in their response to COVID-19. Based on the impact analysis, this paper proposes corresponding suggestions for investment strategies and macrocontrol decisions.