Does Chinese Financial Market Information Promote Listed Manufacturing Firms’ Productivity?

Abstract

There have been many research studies that have examined the impact of financial development on economic growth, but few of them have explored this problem from the perspective of financial market information. In this paper, we investigate whether the stock price informativeness affect the listed firms’ sustainable growth by using the Chinese manufacturing listed companies’ data from 2007 to 2017. Specifically, we use the stock price nonsynchronicity and turnover rate to measure stock price informativeness, and the economic growth sustainability is proxied by the listed companies’ total factor productivity, which is the driving force of firms’ sustainable and steady growth. We find that higher stock price informativeness is associated with higher total factor productivity, no matter whether the stock price informativeness is proxied by the stock price nonsynchronicity or turnover rate. This finding is robust when we mitigate for endogeneity issues, and when we use the return on assets (ROA) as an alternative proxy for economic growth. Our results show that the stock price informativeness can significantly improve the total factor productivity of the listed companies, and play an important role in the sustainable development of listed manufacturing enterprises.

Total factor productivity growth and its contribution: lessons from the Chinese construction industry pre- and post-2008 financial crisis

“…For enhancing the competitive advantage of the construction industry, some practical policy implications are provided to government and policymakers based on the above learned lessons. As noted by researchers and practitioners (Hu and Liu, 2018; Lai et al , 2019; Ye et al , 2019), promoting TFPG is the fundamental way to better survive in the increasingly challenging economic environment. To this end, according to the lessons learned from the experience of the Chinese construction sector, government and policymakers should mitigate administrative intervention to avoid the imported and unsustainable improvement.…”

Non-Financial Enterprises’ Shadow Banking Business and Total Factor Productivity of Enterprises

“…To further examine information asymmetry, non-FEs' SBB, and TFP of enterprises. Referring to Xu et al [46], Gul et al [47] and Lai et al [48], we adopt stock price synchronization to measure the degree of information asymmetry. Specifically, a higher degree of stock price synchronization corresponds to a lower degree of stock price idiosyncratic information, as well as a higher degree of information asymmetry.…”