Does Chinese Financial Market Information Promote Listed Manufacturing Firms’ Productivity?

Fujun Lai, Qian Wang and Qingxiang Feng
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Fujun Lai: Chinese Academy of Finance and Development, Central University of Finance and Economics, Beijing 100081, China
Qian Wang: School of Management Science and Engineering, Central University of Finance and Economics, Beijing 100081, China
Qingxiang Feng: Institute of Guangdong Hong Kong and Macao Development Studies, Sun Yat-sen University, Guangzhou 510275, China

Sustainability, 2019, vol. 11, issue 2, 1-20

Abstract: There have been many research studies that have examined the impact of financial development on economic growth, but few of them have explored this problem from the perspective of financial market information. In this paper, we investigate whether the stock price informativeness affect the listed firms’ sustainable growth by using the Chinese manufacturing listed companies’ data from 2007 to 2017. Specifically, we use the stock price nonsynchronicity and turnover rate to measure stock price informativeness, and the economic growth sustainability is proxied by the listed companies’ total factor productivity, which is the driving force of firms’ sustainable and steady growth. We find that higher stock price informativeness is associated with higher total factor productivity, no matter whether the stock price informativeness is proxied by the stock price nonsynchronicity or turnover rate. This finding is robust when we mitigate for endogeneity issues, and when we use the return on assets (ROA) as an alternative proxy for economic growth. Our results show that the stock price informativeness can significantly improve the total factor productivity of the listed companies, and play an important role in the sustainable development of listed manufacturing enterprises.

Keywords: stock price informativeness; stock price nonsynchronicity; turnover rate; total factor productivity; financial market information; sustainable development (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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