An Empirical Study On The Short-term Impact Of Margin Trading On Corporate Performance Of Listed Companies

With the rapid development of China's economy and the deepening of reform and opening-up,the voice of accelerating the development of the securities market is getting higher and higher.The emergence of margin trading system is a very important innovation in China's securities market,which provides investors with new investment methods and profit margin space in China's securities market.At the same time,it also urges listed companies with margin trading targets to pay more attention to enterprise management and market value management.Since March 31,2010,China's margin trading has been formally implemented,margin trading has developed rapidly and has been sought after by investors.So far,China has carried out five gradual expansion.The margin trading target has increased from 90 to 950,and the balance of margin trading in 2018 is 755.7 billion RMB.Margin trading has developed in developed countries in Europe and the United States for nearly a hundred years,while China's margin trading system has only nine years since its introduction.Since the introduction of margin trading system,many scholars have begun to study the impact of margin trading on the securities market and listed companies.According to the results of literature review,scholars have not reached unanimous conclusions about the impact of margin trading on the securities market.Some scholars believe that the introduction of margin trading can improve the efficiency of stock pricing,promote market liquidity,and suppress market volatility.However,some scholars believe that the impact of margin trading on the securities market is negative.As for the impact of margin trading on listed companies,it mainly focuses on enterprise innovation and earnings management.The conclusion shows that margin trading cannot promote the innovation of listed companies,but can inhibit the manipulation of earnings management of listed companies.Based on the research direction and methods of relevant literature,this paper decides to start from the point of view of margin trading on the performance of listed companies.After the introduction of margin trading,will listed companies strive to operate as margin trading targets,improve the operating efficiency of enterprises and maximize the interests of shareholders? Considering that the development of margin trading in China is only nine years,the empirical data in this paper are annual data,so this paper will mainly research the short-term impact of margin trading on the corporate performance of listed companies.This paper uses literature analysis,normative research and empirical research methods to study the impact of margin trading on corporate performance of listed companies.The model used in empirical research is a fixed-effect double-difference model to control the individual and time of listed companies.At the same time,we choose listed companies with margin trading as the research object and ROA as the performance index of listed companies.The return on net assets(ROE)and return on investment capital(ROIC)are regarded as the reference indicators of corporate performance.Five incremental expansion time series are used to divide the listed companies of margin trading into experimental group and control group.The empirical process is divided into three groups according to the actual situation and time overlap.In order to ensure the accuracy of the empirical results,this paper uses the tendency score matching method(PSM)to match the listed companies with nonmargin trading as the blank control group to test the robustness.According to the empirical results of this paper,we find that margin trading can not promote the performance of Listed Companies in the short term,that is,the emergence of margin trading mechanism inhibits the growth of corporate performance of listed companies.Based on this,this paper analyzes the reasons for this result may be the following two points: first,after listed companies become margin trading targets,the degree of earnings management manipulation is suppressed,which may cause the performance indicators of enterprises to become smaller after listed companies become margin trading targets,resulting in negative empirical results;second,after listed companies are included in margin trading targets,in order to maintain the fund.The image in the financial market and attracting investors,adopting a series of reform measures such as operating principles and enterprise innovation,consumed the company's funds,but did not get a return,resulting in poor operating efficiency and so on.The specific causes of the impact need further in-depth study.Finally,this paper puts forward some suggestions from the perspective of the development of margin trading,investors and listed companies in China's securities market.There are three main innovations in this paper.First,after the development of the securities market in recent years,the data of margin trading is more abundant,and empirical research is more referential.Secondly,this paper bypasses the macro part of literature research and conducts empirical research from the micro perspective on the impact of margin trading on the performance of listed companies.It also studies whether listed companies will improve their own corporate performance after entering the margin trading target,which has more reference significance for both listed companies and investors.Thirdly,this paper studies the short-term impact of margin trading on the performance of listed companies by using the fixed-effect double-difference model of controlling the individual and time of listed companies,and uses the tendency score matching method to select nonmargin trading listed companies as the blank control group for robustness test,which makes the experimental results more convincing.