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Share pledging and stock price synchronicity: Evidence from China

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  • Jin, Yanbo
  • Wei, Siqi
  • Xu, Jian

Abstract

This paper examines the impact of share pledging on the incorporation of firm-specific information into stock prices, measured by stock price synchronicity. Using a comprehensive dataset of listed firms in China, we find that share pledging significantly increases the amount of firm-specific information reflected in stock prices. This effect is particularly pronounced in firms with lower transparency. Additionally, we explore the implications of share pledging and synchronicity for firm value. While stock price synchronicity is negatively associated with firm value, share pledging alone shows no direct relationship. However, in firms with lower stock price synchronicity, share pledging positively influences firm value.

Suggested Citation

  • Jin, Yanbo & Wei, Siqi & Xu, Jian, 2025. "Share pledging and stock price synchronicity: Evidence from China," Emerging Markets Review, Elsevier, vol. 65(C).
    • Handle: RePEc:eee:ememar:v:65:y:2025:i:c:s156601412500007x
    DOI: 10.1016/j.ememar.2025.101258
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    More about this item

    Keywords

    Share pledging; Stock price synchronicity; Firm-specific return variation; Firm-specific information; Corporate transparency; Tobin's Q; Emerging market;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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