Does Margin Trading Enhance Information Efficiency of the Capital Market?——Evidence from China

On March 31,2010,China formally introduced a margin trading system,which announced that China's capital market has completed the transformation from a unilateral transaction model to a bilateral transaction model with a short-selling mechanism.However,the current development of China's margin trading and securities lending businesses is seriously unbalanced,and the scale of financing far exceeds the scale of securities lending.The short selling effect of securities lending exchanges is extremely limited,which to some extent violates the original intention of introducing the system.In order to help margin trading and securities lending to correct a healthy and sustainable development path,this article uses stock price synchronicity as a proxy indicator to measure the information efficiency of the capital market,explores the impact of the margin trading system on the information efficiency of the capital market,and study the detailed characteristics and economic consequences of the margin trading system.Aiming at this topic,this article analyzes the relationship between margin financing and securities lending and stock price synchronicity.Finally,it analyzes the influence of margin financing and securities lending system on stock price synchronicity from three dimensions of corporate governance,external supervision,and institutional environment mechanism.In terms of empirical research,this article takes advantage of the“quasi-natural experiment”provided by the gradual opening of margin trading and securities lending in China’s securities market,and selects listed companies on the Shanghai and Shenzhen stock exchanges from 2007 to 2019 as the research objects,starting from the perspective of stock price synchronicity,and passing The DID-FE model studies the impact of the margin trading and securities lending system on the information efficiency of the capital market.It uses three methods:parallel trend and dynamic testing,PSM-DID analysis,and placebo testing for robustness testing to solve the endogeneity problem of the experiment.This article also conducts deeper research on the subject based on the two dimensions of the impact mechanism of margin financing and securities lending and the size of the company,and finally discusses the economic impact of margin financing and securities lending on the level of company innovation.

Margin trading, short selling, and bond yield spread

Using a quasi-natural experiment, this study examines the effects of margin trading and short selling on bond yield spread in China. It finds that both margin trading and short selling can reduce bond yield spread. Additionally, it finds that margin trading lowers firms' debt ratios and increases their credit ratings, which explains the reduced spread. In other words, margin trading can impact investors' decisions by revealing positive information about a firm.Another finding is that short selling lowers the bond yield spread by decreasing earnings management, suggesting that short selling has an impact on investors' decisions through its effect on corporate governance. Our results suggest that margin trading transmits positive information and short selling impacts firms' policies. These results provide support for future regulations of margin trading and short selling.

The trade margins of Chinese agricultural exports to ASEAN and their determinants

How do Chinese agricultural exports to ASEAN（Association of Southeast Asian Nations） evolve？ And what factors affected the evolution pattern？ This study measures the trade margins of Chinese agricultural exports to ASEAN by utilizing the 2000-2015 Harmonized System＇s six-digit agricultural trade data, and further analyzes their determinants by developing an augmented gravity model of international trade. The results indicate that, the main growth source of Chinese agricultural exports to ASEAN has shifted from the extensive margin before the formal establishment of CAFTA（China-ASEAN Free Trade Area） in 2010 to the intensive margin since the formal establishment of CAFTA, but changes in Chinese agricultural exports to ASEAN have always mainly depended on the intensive margin. Since the formal establishment of CAFTA, the evolution pattern of Chinese agricultural exports to ASEAN has shifted from ＂more varieties, low price, and small quantity＂ to ＂less varieties, high price, and large quantity＂. Relative economic scale, relative population scale, capacity of agricultural export, trade integration, global financial crisis, and common border significantly affect the trade margins of Chinese agricultural exports to ASEAN.

Cross-border E-commerce and China's Exports during the COVID-19 Pandemic

China's exports experienced a rapid recovery after the outbreak of the 2019 COVID-19 pandemic.A primary engine was cross-border e-commerce(CBEC)trade,which bucked the downward export trend during the pandemic.By exploring the variation in the number of CBEC comprehensive pilot zones across provinces,we identified the causal impact of CBEC on exports using monthly province-product-destination data for 2019 and 2020.We found strong and robust evidence that CBEC contributed to exports during the pandemic by promoting the expansion of incumbent exports(intensive margin)rather than through the expansion of product categories and exporting partners(extensive margin).Specifically,higher pandemic risk suppressed the role of CBEC at the intensive margin while enhancing it at the extensive margin.Exports to developed countries benefited more from CBEC,both intensively and extensively.Compared with final products,a larger number of intermediate products were exported through CBEC after the outbreak of the pandemic.

Short-Term and Long-Term Margins of International Trade： Evidence from the Canada-Chile Free Trade Agreement

We investigate the impact of the Canada-Chile Free Trade Agreement （CCFTA） on Canadian exports to Chile, particularly the dynamic effects of the agree- ment on extensive and intensive margins of trade. Consistent with the literature, we find that the extensive margin effects occurred later than the intensive margin effects and became more prominent in the long-term. Surprisingly, the intensive margin ef- fects died off in the long-term. A theoretical model is constructed to show that our results can arise in a standard setting of intra-industry trade.

How the Internet Promotes China’s Exports:A Firm-level Perspective

The development of information and communications technologyv(ICT),particularly the Internet,has reduced trade costs.However,it remains unclear whether these reduced costs are reflected in the “extensive margins”of firms'exports(which refer to the probability of firms exporting)or the “intensive margins”(which refer to the value of firms'export).To test this,we used the concepts of information cost and binary margins,an augmented trade model of firm heterogeneity,a two-stage Heckman estimation,and data from the World Bank Enterprise Survey of Chinese firms in 2012.The results revealed that reduced trade costs from the use of ICT were positively related to extensive margins but that the connection with intensive margins was not significant.The results lead to the conclusion that reduced information costs related to a firm's exporting behavior were primarily reflcted in variable trade cosis.This study offers theoretical and empirical evidence for China 3 policies towards the Internet,which are relevant for the export of manufactured goods.The government should encourage the use of ICT to enhance firms export opporunities while facing current trade policy uncerainty.