Does improving stock market information efficiency promote firms’ high-quality development?

Xiaoxu Geng, Muyuan He, Chengying He and Yuexiang Jiang

International Review of Economics & Finance, 2025, vol. 97, issue C

Abstract: The efficiency of stock price feedback mechanisms in emerging capital markets directly affects the quality of corporate development. As one of the largest emerging capital markets globally, China's stock market is currently transitioning from a high-growth stage to a high-quality development stage. Therefore, exploring how Chinese enterprises can improve their production efficiency is of great theoretical and practical significance for promoting economic transformation and development. Considering stock market information efficiency as the starting point and corporate high-quality development as the standpoint, this study selects companies listed on China's A-share market from 2001 to 2021 as the research sample and comprehensively explores how stock market information efficiency affects corporate high-quality development. Findings indicate that improved stock market information efficiency can promote corporate high-quality development, both in the short and long terms. Further research shows that the governance mechanism positively influences this process. Finally, heterogeneity analysis shows that non-state-owned enterprises, enterprises with diversified business models, and enterprises in the growth stage are more significantly affected by stock market information efficiency in terms of production and operation efficiency. This study provides crucial empirical evidence that the information value of the stock market can directly affect corporate development and provides policy implications for improving the capital market and high-quality development.

Keywords: Stock market efficiency; High-quality corporate development; Governance mechanisms; Stock price information content; Total factor productivity (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:97:y:2025:i:c:s1059056024008281

DOI: 10.1016/j.iref.2024.103836

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