The Role of the Stock Market in Influencing Firm Investment in China
نویسندگان
چکیده
This study investigates the impact of China’s stock market on firm-level investment by using a panel data set constructed by the author of all Chinese listed firms for the period of 1992 to 1999 and by applying both fixed effects and generalized method of moments (GMM) techniques. The results show that stock market valuation has a highly significant and positive influence on listed firms’ investment decisions, particularly during the stock market boom from 1996 to 1999. However, based on the present-value model, it is found that stock market valuation in China deviates significantly from underlying fundamentals. As a result, the recent stock market expansion in China is likely to produce an inefficient resource allocation and cause detrimental effects on the real economy.
منابع مشابه
تاثیر شوکهای سیاست پولی و مالی بر بازار سهام ایران
In recent decades the development of capital markets in developing countries, economic growth is desirable to have. Developed countries owe much of its development direction of financial markets, especially the stock market knows. The stock market is precisely the collection of savings and private capital to finance investment projects and on the other hand, an official and is confident that th...
متن کاملThe Impact of China’s Investment on Malaysia
China has been moving out from its country into other countries in the world, including Malaysia, with some positive and negative news. We are to examine the impact of China’s investment on our employment, price level and productivity as well as sectoral stock market performances: consumer products and services; construction and industrial sectors. The causality analyses on quarterly data from ...
متن کاملExamination of the Predictive Power of Fama-French Five-Factor Model by the Inclusion of Skewness Coefficient: Evidence of Iranian Stock Market
Due to the complexity of financial markets and specialization of investment, the investors in financial markets need tools, methods and models by which they can choose the best investment and the most appropriate portfolios. Fama-French Five-Factor Model (FFFFM) is one of the newest methods among various methods for financial asset pricing and prediction of stock returns. The main aim of this r...
متن کاملThe Impact of Leverage on Firm Investment: Evidence from Tehran Stock Exchange
The impact of financial leverage on firm investment is one of the most important issues in corporate finance. Debt overhang reduces the incentives of shareholder–management coalition in controlling the firm to invest in positive net-present-value investment opportunities. On the other hand, firms without debt in their financial structure face with a new problem known as over-investment. T...
متن کاملThe Impact of Corporate income Tax and Firm Size on Fixed Investment
This paper is an attempt to analyze the impact of income taxes and market capitalization on fixed investment (investment in tangible assets) by manufacturing companies listed on KSE. This paper basically examines that how corporate income taxes affect fixed investment by reducing cash flow available for a firm to invest and how the firm size in the lights of market capitalization affects fixed ...
متن کامل