Capital Market Liberalization And Corporate Risk-taking

Since the opening of the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect Trading System,the influence of China’s A-shares in the international market has been increasing.In this context,how the increasingly internationalized capital market will change the destiny of the country’s economic development has become the focus of common concern in both the practical and academic circles.At the same time,the real economy is the foundation of Chinese economic development during the "14th Five-Year Plan" period.As a important part of the real economy,a company’s willingness to take risks is a decisive factor in whether a country can stabilize its GDP and increase total factor productivity.This thesis uses the Shanghai-Hong Kong Stock Connect trading system and Shenzhen-Hong Kong Stock Connect Trading System to design a quasi-natural experiment,based on the empirical evidence of China’s A-share listed companies from 2010 to 2017,to test the relationship between capital market liberalization and corporate risk-taking.The results of the main effects analysis show that the implementation of Shanghai-Hong Kong Stock Connect Trading System and Shenzhen-Hong Kong Stock Connect Trading System can promote corporate to take risks;the results of the mechanism test show that capital market liberalization increase the level of corporate risk-taking through two channels: optimizing the company’s equity structure and alleviating the company’s financing constraints.Further research found that this effect is more significant in companies with non-state-owned,lower analyst attention,lower institutional ownership,and more traded volume.This thesis expands the research perspective of the theory of corporate risk-taking,enriches the research findings on the economic consequences of capital market liberalization,and also evaluates the policy effects of Shanghai-Hong Kong Stock Connect Trading System and Shenzhen-Hong Kong Stock Connect Trading System on the real economy,providing a support for the further reform of Chinese capital market.