Does mixed-ownership reform restrain stock price synchronicity? Evidence from China

Wei Wang, Sijia Cheng, Shamsun Nahar, Shadi Emad Areef Alhaleh and Hua Wang

Economic Analysis and Policy, 2022, vol. 73, issue C, 390-404

Abstract: We examine the relation between the mixed-ownership reform and the degree of stock price synchronicity by using a sample of 1211 listed State Owned Enterprise (SOE) for the period of 2003–2018 in China. Through empirical assessment, we reveal robust evidence that the higher intensity of the mixed-ownership, the lower degree of SOE stock price synchronicity. Based on path analysis, we verified the negative correlation between the mixed-ownership intensity and the stock price synchronicity via two paths, namely information transparency and analyst coverage augmentation. Our additional analysis established that the negative association between the mixed-ownership intensity and stock price synchronicity is strongly influenced by the decentralization of local governments. Specifically, the stronger degree of decentralized regional governments, the more significant their negative effect.

Keywords: State-owned enterprise; Mixed-ownership; Reform; Stock price synchronicity; China (search for similar items in EconPapers)
JEL-codes: G32 G34 G38 M41 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:73:y:2022:i:c:p:390-404

DOI: 10.1016/j.eap.2021.11.003

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