Cross‐shareholding networks and stock price synchronicity: Evidence from China
Yujie Yuan and
International Journal of Finance & Economics, 2021, vol. 26, issue 1, 914-948
This article investigates the effect of cross‐shareholdings on stock price synchronicity, as a measure of price informativeness, of the listed firms in the Chinese stock market. We gauge firms' levels of cross‐shareholdings in terms of centrality in the cross‐shareholding network. It is confirmed that it is through a noise‐reducing process that cross‐shareholdings promotes price synchronicity and reduces price delay. More importantly, this effect on price informativeness is pronounced for large firms and in the periods of market downturns. Overall, our analyses provide insights into the relation between the ownership structure and price informativeness.
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Persistent link: https://EconPapers.repec.org/RePEc:wly:ijfiec:v:26:y:2021:i:1:p:914-948
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International Journal of Finance & Economics is currently edited by Mark P. Taylor, Keith Cuthbertson and Michael P. Dooley
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