Research On The Impact Of Margin Trading On Inefficient Corporate Investment

China has implemented the financing and financing system since 2010,and so far the system has made rapid development in terms of both the scope of the underlying and the number of transactions,becoming an important part of the capital market.The implementation of the financing and financing system has introduced a short selling mechanism to China’s capital market,ending the long-standing "unilateral market" in China.This paper compares the literature on the financing and financing system and corporate inefficient investment and finds that the implementation of the financing and financing system not only affects the liquidity,volatility and pricing efficiency of the capital market at the macro level,but also affects the management behavior,investment decisions and surplus management of enterprises at the micro level,which ultimately helps to reduce the level of information asymmetry and alleviate the principal-agent problem.In addition,most enterprises in China have the problem of inefficient investment,with some enterprises under-investing and some over-investing.The main causes of inefficient investment are information asymmetry and principal-agent problem.Since the financing and financing system can alleviate these two problems,the following three questions are raised and studied in this paper: First,can the financing and financing system suppress inefficient investment? Second,if so,is there a significant difference between the pre-and post-epidemic phases? Third,is there any difference in the impact of the financing and financing system on inefficient investment when A-shares are at different stages of market sentiment or when the nature of corporate property rights is different?In order to answer the above questions,it is necessary to find a reasonable way to measure the level of inefficient investment of enterprises.In this paper,based on combing the literature on the measurement of inefficient investment of enterprises,we summarize the early and currently mainstream Tobin’s Q model,investment-cash flow sensitive model(FHP model),cash flow and investment opportunity cross product term discriminant model(Vogt model)and Richardson The strengths and limitations of the Richardson model.Since the Richardson model can compensate for the limitations of the previous three models,this paper chooses this model to measure corporate inefficient investment.Based on the measured level of corporate inefficient investment,this paper conducts an empirical study on each of the above three questions.The paper constructs a double difference model to address the first question and concludes that the implementation of financing and financing has significantly reduced the level of inefficient investment and improved the investment efficiency of enterprises,both in terms of overall inefficient investment and inefficient investment(overinvestment and underinvestment)at the segment level.To test the robustness of the above results,this paper also uses parallel trend hypothesis test,propensity score matching method and control firm and year method for testing,all of which show that the above findings are robust.In response to question 2,this paper divides the sample into two groups before and after the epidemic,and the findings show that there is no significant difference in the inhibitory effect of financing and financing on corporate inefficient investment before and after the epidemic.This also justifies that this paper does not exclude the epidemic period when selecting the sample interval.To answer the third question,this paper first groups the samples by bull and bear markets and examines the difference in the impact of the financing and financing system on inefficient investment between the two groups.The results show that at the overall level of inefficient investment,there is not much difference between the two groups of samples,but at the subdivision level of inefficient investment,there is a large difference,as follows: in the bull market,the suppressive effect of financing and financing on underinvestment is more obvious;in the bear market,the suppressive effect of financing and financing on overinvestment is more obvious.The paper then divides the sample into two groups of SOEs and nonSOEs to examine the differences in the impact of the financing and financing system on inefficient investment between SOEs and non-SOEs.The results show that the implementation of the financing and financing system does not have a significant inhibitory effect on inefficient investment in SOEs compared to non-SOEs,both at the aggregate level and at the segmentation level.Finally,based on the above findings,this paper proposes the following four policy recommendations: First,to further expand the scope of the underlying enterprises for financing and financing,so as to enhance the inhibitory effect of the financing and financing system on inefficient investment of enterprises.Second,actively promote the development of securities financing business,narrow the gap between securities financing business and financing business,and give full play to the ex ante deterrent and ex post punitive effects of securities financing business to encourage enterprises to make efforts to improve their investment efficiency.Third,strengthen the education of investors in general and the management of analysts who are important intermediaries in the market,thus alleviating the problem that financing and financing does not have an obvious inhibiting effect on over-investment in bull markets and under-investment in bear markets.Fourth,adopt targeted policy measures to address the inefficiency of SOEs,specifically by strengthening supervision,promoting market-based management of SOEs and management selection of SOEs,and diversifying the property rights of SOEs and commercial banks.