Shanghai-Hong Kong Stock Connect And Enterprise Diversification

The governance effect endowed by the opening of capital market and the effect of internal capital market are the key factors affecting the diversification of enterprises.Most of the existing research have assumed that the motivation of enterprise diversification lies in grabbing market resources through diversification,optimizing internal allocation of resources,and disperses non-systemic risks to alleviate financial distress,etc.,while ignoring the moral hazard and other factors caused by the two kinds of agency problems caused by the high concentration of equity.Considering that the capital market has always been in the realistic background of continuous opening,"Shanghai-Hong Kong Stock Connect",as one of the main systems of a series of policies introduced,is playing an increasingly profound role in strengthening the opening of the capital market and optimizing the operation of enterprises with the advance of time.However,there are few relevant literatures on the possible impact of the Shanghai-Hong Kong Stock Connect system on the diversified behavior of enterprises under the background of capital market opening.Based on the above narrate,paper takes the data of Chinese listed companies from 2010 to 2021 as research samples.The results show that:(1)The Stock Connect has a negative inhibitory effect on enterprise diversification.(2)It is found that there are more significantly affected by capital market opening by property rights classification and go with high political burden and high agency costs are most significantly affected.(3)Based on the mechanism test of the governance effect of the Shanghai-Hong Kong Stock Connect,it is found that the opening of the capital market affects the internal diversification of enterprises by giving full play to the external governance effect and the substitution effect of the internal capital market.(4)After the test of diversification,enterprise value and enterprise innovation,it is found that enterprise diversification significantly reduces the two types of values of enterprises,which is not conducive to the R&D input and innovation output of enterprises.The Shanghai-Hong Kong Stock Connect can improve enterprise value by inhibiting enterprise diversification and investing capital in enterprise innovation activities.The possible enlightenments and policy suggestions of this thesis are as follows:(1)The opening of the capital market should continue to adhere to the principle of gradual opening.(2)For domestic enterprises,according to the principle of "highlighting the main business and returning to the core development.(3)For the regulatory authorities,the guidance and education of local investors and the cultivation of information intermediaries should be strengthened.we should strengthen the cultivation of information intermediary market,enhance the role of information intermediary in information acquisition,help enterprises and investment to make better decisions.