Share pledging and stock price synchronicity: Evidence from China

Yanbo Jin, Siqi Wei and Jian Xu

Emerging Markets Review, 2025, vol. 65, issue C

Abstract: This paper examines the impact of share pledging on the incorporation of firm-specific information into stock prices, measured by stock price synchronicity. Using a comprehensive dataset of listed firms in China, we find that share pledging significantly increases the amount of firm-specific information reflected in stock prices. This effect is particularly pronounced in firms with lower transparency. Additionally, we explore the implications of share pledging and synchronicity for firm value. While stock price synchronicity is negatively associated with firm value, share pledging alone shows no direct relationship. However, in firms with lower stock price synchronicity, share pledging positively influences firm value.

Keywords: Share pledging; Stock price synchronicity; Firm-specific return variation; Firm-specific information; Corporate transparency; Tobin's Q; Emerging market (search for similar items in EconPapers)
JEL-codes: G10 G14 G30 G32 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:65:y:2025:i:c:s156601412500007x

DOI: 10.1016/j.ememar.2025.101258

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