Financing Constraints and Stock Price Volatility Empirical Evidence from Shanghai and Shenzhen A-share listed Companies

Based on the theoretical analysis of financing constraints and stock price volatility, hypothesis “corporate inhibiting corporate volatility” is proposed. After data cleaning, cross-sectional based A-share was used to make an empirical relationship between volatility listed companies in 2018 through regression model. The study found that when relax constraints, due widespread overinvestment, will fluctuate more. In addition, we have shown by replacing return constraint indicators subsamples enterprise size, market type ownership, conclusion more robust. research reveals mechanism impact prices. conclusions practical significance for investors, corporations relevant regulatory authorities.