Empirical Study Based On Difference-in Difference Mode On The Influence Of Market Making On The Growth Of Market Value And Liquidity Of National Equities Exchange And Quotations

Since National Equities Exchange and Quotations(NEEQ)were set up in 2006,there are 10,567 companies listed on board as by Jan 31 st,2016.As IPO suspended,NEEQ expanded rapidly.Different from instant trading system,NEEQ companies only can transfer stocks by making agreement.Lack of professional standards on value assessment and limitation of investors both make NEEQ very low in liquidity.On August 25 th,2014,NEEQ implement market making system,which allows the third party as stock agent to wholesale company stocks,and make bilateral quotations.Difference-in-difference mode is applied in this paper to do empirical study on the influence of market making on the growth of market value and liquidity of NEEQ.After examining the prerequisites of application of DID mode,regression was done on the sample pool of 345 listed companies.The results of study are as followings: in the first year,market making had promoted market value increase of listed companies,and raised closing rate by 39.75% and turnover rate by 45.76%,and increased PB ratio by 2.34.As time moves on,the policy influence was weakened.Moreover,by DID examination on companies from difference industries,results say that the increase of market value occurred in companies from telecom,nondaily commodities,information technology and industry.Additionally,differences among industries and times was concluded through DID examination by different index.