Please use this identifier to cite or link to this item: https://hdl.handle.net/10356/139026
Title: Float, speculation and stock price : evidence from the split share structure reform in China
Authors: Hwang, Chuan-Yang
Zhang, Shaojun
Zhu, Yanjian
Keywords: Business::General
Issue Date: 2016
Source: Hwang, C.-Y., Zhang, S., & Zhu, Y. (2018). Float, speculation and stock price : evidence from the split share structure reform in China. The Singapore Economic Review, 63(3), 701-729. doi:10.1142/s0217590816500260
Journal: Singapore Economic Review
Abstract: The Split Share Structure Reform in China offers a unique opportunity to test whether the supply of tradable shares (i.e., float) has a significant impact on the degree of speculation. After firms completed the reform, their float increased by 31% on average, while turnover and trading volume also increased substantially. We use information from firms' reform plan to derive an estimate of the price premium of tradable shares over non-tradable shares before the reform and find that, after controlling for differences in liquidity and profitability, the price premium is significantly related to proxies for the level of speculative trading in tradable shares. Moreover, firms that were highly speculated before the reform had significantly smaller increase in turnover and trading volume than firms that were less speculated. Overall, our evidence confirms that there is a significant speculative component in the market price of tradable shares in China and a large increase in float dampens speculative trading.
URI: https://hdl.handle.net/10356/139026
ISSN: 0217-5908
DOI: 10.1142/S0217590816500260
Rights: © 2016 World Scientific Publishing Company. All rights reserved.
Fulltext Permission: none
Fulltext Availability: No Fulltext
Appears in Collections:NBS Journal Articles

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