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Impact of split share structure reform on capital structures: empirical evidence from China’s listed companies

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  • Hong Zhang
  • Shuai Gao
  • Fei Yang

Abstract

An econometric model based on a natural experiment and the difference-in-differences method is introduced to empirically investigate the impact of split share structure reform on capital structures. A total of 1026 listed companies in Chinese A-share during 2001--2011 are used as the sample for the research and interest-bearing debt ratios (BDRs) are taken as a representative indicator for capital structures. The theoretical and empirical analysis indicates that both market expansion effect and corporate governance effect caused by the split share structure reform are associated with an increase in BDR. As far as the timeliness is concerned, the effects of split share structure reform on capital structures will last 3--4 years.

Suggested Citation

  • Hong Zhang & Shuai Gao & Fei Yang, 2016. "Impact of split share structure reform on capital structures: empirical evidence from China’s listed companies," Applied Economics, Taylor & Francis Journals, vol. 48(13), pages 1172-1181, March.
    • Handle: RePEc:taf:applec:v:48:y:2016:i:13:p:1172-1181
    DOI: 10.1080/00036846.2015.1096000
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    Cited by:

    1. Wei He & Qian Wang, 2020. "The peer effect of corporate financial decisions around split share structure reform in China," Review of Financial Economics, John Wiley & Sons, vol. 38(3), pages 474-493, July.
    2. Jebran, Khalil & Chen, Shihua & Tauni, Muhammad Zubair, 2019. "Principal-principal conflicts and corporate cash holdings: Evidence from China," Research in International Business and Finance, Elsevier, vol. 49(C), pages 55-70.
    3. Wei He & NyoNyo A Kyaw, 2023. "Macroeconomic risks and capital structure adjustment speed: The Chinese evidence," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 2885-2899, July.
    4. Jebran, Khalil & Chen, Shihua & Zhang, Ruibin, 2020. "Board diversity and stock price crash risk," Research in International Business and Finance, Elsevier, vol. 51(C).

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