An Empirical Study On Returns Of Restricted Stocks Before And After Unlocking In Chinese Growth Enterprise Market

This paper focuses on the unlocking on the restricted shares of Chinese GEM and discusses the correlation between the changes of related policies and regulations and the changes of market reaction before and after the lifting of the ban on the sale of shares,totally 698 samples from November 1,2010 to December 2016.The policy period is divided into different four periods,and to represent AAR and CAR as the market reaction,analyses the reasons for change of it.Research shows that: the market reaction of the unlocking events in different periods is very different.There’s a correlation between the change of their market reaction and the change of unlocking and reduction policy.The short-term negative reaction before unlocking gradually weaken or even disappear as the strictly on policies.Finally,this paper puts forward some suggestions on the improvement of policy makers,strengthen information disclosure and protect the legitimate rights and interests of minority shareholders.I suggest the announcement of reduction by executives before reduction instead of after it.Also,we should increase the effort of market supervision and severely punish those who violate the law and discipline regarding illegal reduction and information disclosure.