Research on the Impact of the Registration Reform on the Capabilities of NEEQ-Listed Companies

In recent years, China has introduced registration reforms across various market segments like Shanghai and Shenzhen main boards, the STAR Market, the ChiNext Market, and the NEEQ (National Equities Exchange and Quotations). Although there is some significant research exists on the effects of these reforms on major stock exchanges, there is limited focus on their impact on the profitability of companies on NEEQ. The study examines how registration-based reform influences the profitability of NEEQ-listed firms in order to address this gap. Using the Difference-in-Differences (DID) method, this research evaluates the causal effects of the reform on corporate profitability. To ensure robustness, parallel trend analysis is conducted to verify the DID results. Furthermore, a heterogeneity analysis explores whether the company age can influence the outcomes or not. The findings indicate that registration-based reform has not had a statistically significant impact on the profitability of NEEQ-listed companies. These results suggest that while structural reforms aim to enhance market efficiency and transparency, their immediate effects on smaller or emerging-market segments may differ from those observed in large. This study contributes valuable insights to policymakers and investors focused on China’s evolving capital markets.