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Information, sentiment, and margin trading of Chinese stock market

Author

Listed:
  • Hai Lin
  • Pengfei Liu
  • Cheng Zhang

Abstract

This paper examines whether information or sentiment drives margin trading in the Chinese stock market. At the aggregate level, no conclusive evidence indicates a dominance of either information‐driven or sentiment‐driven margin trading activities. However, at the individual firm level, we observe both types of margin trading, underscoring the need to consider the heterogeneity of margin trading when reconciling previous research findings. Moreover, we find that the likelihood of sentiment‐driven margin trading significantly declined following regulators' implementation of stricter rules for margin trading in 2015.

Suggested Citation

  • Hai Lin & Pengfei Liu & Cheng Zhang, 2025. "Information, sentiment, and margin trading of Chinese stock market," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 65(1), pages 81-108, March.
    • Handle: RePEc:bla:acctfi:v:65:y:2025:i:1:p:81-108
    DOI: 10.1111/acfi.13319
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    References listed on IDEAS

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