| China officially launched the margin-trading and short-selling trading pilot in March 10,2010.The number of the underlying securities have reached 950 by the end of 2016 after expansion.The development of this trading mechanism has changed the market environment of unilateral transactions in our country,and opened up a new way to gain profit for investors.However,it cannot be ignored that the balance of financing transactions is greater than those of margin transactions.Moreover,two completely opposite operations will inevitably have different impacts on the production and business activities of listed companies.Chinese companies prefer debt financing rather than equity financing,which is different from those developed countries.Creditors may increase risk premium or require a guarantee to minimize their risks because of information asymmetry.Besides,the signals delivered by Margin-trading and Short-selling may vary,which may take into consideration by creditors in debt contracts,and finally lead to changes in debt costs in those listed companies.Therefore,this paper combines the current situation to explore how the whole system of Margin-trading and Short-selling affects the debt financing cost of listed companies.The paper combined PSM and DID to do empirical research through choosing non-financial listed companies from 2007-2016,and according to the property rights and the degree of marketization for further group discussion.The results show that:(1)The debt costs has increased after the company was chosen to become the underlying securities.(2)The negative impact of margin-trading and short-selling on the cost of debt is more significant in private enterprises compared to state-owned enterprises.(3)The negative impact of margin-trading and short-selling on the cost of debt is more obvious in the area of high marketization compared to those firms in low marketization areas. |
PDF Full Text Request