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Impact of real estate tax reform on the security market: Evidence from a synthetic control method

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  • Yuan, Nannan
  • Kong, Rujian
  • Ren, Honghao

Abstract

This study exploits China’s 2011 real estate tax reform in Chongqing and Shanghai as quasi-natural experiments. Using the synthetic control method (SCM), we estimate the causal effects on securities trading volume and volatility. Main results show that securities’ trading volumes increase by 12.12 % in Chongqing, and 17.96 % in Shanghai relative to synthetic counterfactuals. Furthermore, Shanghai exhibited significantly higher securities market volatility following the property tax reform. The findings highlight heterogeneous market responses to localized real estate tax policies, with implications for policymakers targeting financial stability.

Suggested Citation

  • Yuan, Nannan & Kong, Rujian & Ren, Honghao, 2025. "Impact of real estate tax reform on the security market: Evidence from a synthetic control method," Finance Research Letters, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:finlet:v:83:y:2025:i:c:s154461232500875x
    DOI: 10.1016/j.frl.2025.107616
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    References listed on IDEAS

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