Stock Liquidity And Risk-taking Of Listed Companies In China

Since the reform and opening up,China has experienced a long period of rapid growth.From 1978 to 2006,China’s GDP grew from less than 1 trillion yuan to more than 20 trillion yuan,achieving nearly 60 times of growth.However,with the global economic slowdown caused by the global economic crisis and the structural problems of China’s economic development gradually highlighted,China’s economy has gradually stepped down from high-speed growth to medium high-speed growth.Under the background of declining growth rate and increasing economic development pressure,it is urgent to find new growth points,and the economic growth of the whole country is the summary of the growth of each enterprise.Therefore,if the social and economic environment can support each enterprise to grasp the NPV positive investment projects as much as possible and improve its risk-taking level,then each enterprise will grow further To promote the future development of China’s economy.Therefore,in the past research,there have been a lot of research related to corporate behavior,including the level of corporate risk-taking.Whether it is external policy or internal management,it is an important factor that affects the level of corporate risktaking,and even the development of enterprises.However,there is no literature about stock liquidity for corporate risk-taking Research.With the gradual development of China’s financial market,the influence of the stock market on China’s economic development has gradually increased,especially after the opening of the Shanghai Hong Kong stock connect,the incorporation of A-share into the MSCI index and the establishment of the science and technology innovation board,the degree of opening up of China’s stock market has gradually deepened,and the influence of China’s stock market on every enterprise in China,even every enterprise in foreign countries has been increasing It will gradually increase.Therefore,it is of great practical and theoretical significance to study the stock liquidity,which is commonly used in the stock market,for the impact of corporate behavior-Corporate risk-taking.According to the existing literature research results,after in-depth analysis of the impact mechanism of stock liquidity on corporate risk-taking,this paper puts forward three research hypotheses.The first hypothesis is that there is a negative correlation between stock liquidity and enterprise risk-taking;the second hypothesis is that the relationship between stock liquidity and enterprise risk-taking level depends on the property right nature of the company;the third hypothesis is that the rise of stock liquidity will promote the entry of institutional investors,thus negatively affect the risktaking level of the enterprise.Based on the data of Shanghai and Shenzhen A-share listed companies from 2010 to 2018,this paper studies the impact of stock liquidity on the risk-taking level of enterprises.The research shows that the improvement of stock liquidity will make the risk-taking level of enterprises decline significantly,that is,it is not conducive to the radical business activities of enterprises,which proves that the hypothesis is tenable.After that,in order to study whether the negative relationship will be affected by the nature of the property rights of the enterprise,we introduce the interactive term between the nature of property rights and the liquidity of the stock to test,and find that the negative correlation between the liquidity of the stock and the level of risk-taking of the state-owned enterprise is weaker,which proves that hypothesis 2 holds.Then,in order to further study the mechanism between stock liquidity and enterprise risk-taking,we use three-step regression method to test the intermediary effect of institutional investor’s holding variables as intermediary variables.The results show that institutional investor’s holding proportion variables play a part of intermediary effect,and the samples are grouped according to state-owned enterprises and non-state-owned enterprises,and then regression respectively The same result proves that hypothesis three holds.Finally,the results of robustness test and endogeneity test are still valid.Among them,firstly,the endogenous test is tested with instrumental variable,then the opening of Shanghai Hong Kong stock connect is used as an external policy shock,and the dual difference model of tendency score matching is used to study the impact of stock liquidity changes on the level of risk-taking of enterprises before and after the opening of Shanghai Hong Kong stock connect.The results are still valid.The policy significance of the research results of this paper lies in: compared with the state-owned enterprises,the negative correlation between the stock liquidity of the non-state-owned enterprises and their risk-taking level is stronger,so the non-stateowned enterprises should not over pursue the high liquidity,the government and the securities regulators can change the stock liquidity through the market system construction,the trading mechanism reform and other behaviors;for the enterprises themselves,they should build Establish a reasonable anti malicious takeover mechanism,in order to reduce the risk of malicious takeover,so as to promote the level of risk-taking.On the other hand,we should increase the openness of the stock market,introduce foreign advanced investment ideas,and attract more institutional investors with long-term investment ideas to enter the market.The investment of these institutional investors can guide enterprises to pay more attention to their own longterm growth ability,so as to improve their risk-taking level.