TY - JOUR
T1 - Is the stock market just a side show? Evidence from a structural reform
AU - Campello, Murillo
AU - Ribas, Rafael P.
AU - Wang, Albert Y.
N1 - Publisher Copyright:
© The Author 2014.
PY - 2014/9
Y1 - 2014/9
N2 - 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.
AB - 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.
UR - http://www.scopus.com/inward/record.url?scp=84921971617&partnerID=8YFLogxK
UR - https://doi.org/10.1093/rcfs/cfu006
U2 - 10.1093/rcfs/cfu006
DO - 10.1093/rcfs/cfu006
M3 - Article
AN - SCOPUS:84921971617
SN - 2046-9128
VL - 3
SP - 1
EP - 38
JO - The Review of Corporate Finance Studies
JF - The Review of Corporate Finance Studies
IS - 1-2
ER -
