NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Rafael Perez Ribas

Finance Group, Amsterdam Business School
Faculty of Economics and Business
Plantage Muidergracht 12, Room: M 3.06
1018 TV Amsterdam
Netherlands

E-Mail: rpribas@uva.nl

NBER Working Papers and Publications

May 2014Is the Stock Market Just a Side Show? Evidence from a Structural Reform
with Murillo Campello, Yan Wang: w20121
The 2005 split-share reform in China mandated the conversion of nontradable stocks into tradable status. This paper examines the effects of stock markets on corporate outcomes exploiting multiple institutional features of the Chinese conversion program. Using a generalized propensity score matching approach, we identify increases in corporate profitability, investment, value, and productivity as a result of the reform. We also identify changes in firms' likelihood to issue shares and engage in mergers, as well as changes in dividend and capital structure policies. Our findings provide insights on the role of stock markets in shaping corporate activity and on the impact of regulation on economic growth.
 
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