Impact of Market Information Efficiency on Corporate Listing and Financing: Evidence from China

Xin Li and Wei Liang ()
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Xin Li: School of Finance, Capital University of Economics and Business, Beijing 100070, China
Wei Liang: School of Finance, Capital University of Economics and Business, Beijing 100070, China

Sustainability, 2022, vol. 14, issue 20, 1-22

Abstract: In this paper, we examine the impact of China’s capital market information efficiency on enterprise listing and financing. The results reveal the following: (1) High-efficiency market information sharing leads reduced enterprise equity financing costs and waiting times for enterprise listing and to an increased willingness of investors to invest. These effects increase the proportion of domestic financing for Chinese companies and the proportion of domestic listings. (2) Compared with non-crisis periods, market information efficiency did not affect the listing and financing of Chinese enterprises during the US subprime mortgage crisis, and its promotion effect declined during the global financial crisis and European debt crisis. (3) The promotion effect of market information efficiency on enterprise listing and financing is strengthened by the cross listing of enterprise AB and AH shares. (4) The impact of market information efficiency is more significant for private enterprises than for state-owned enterprises.

Keywords: listing and financing; market information efficiency; financial crisis; cross listing; state shareholding (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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