Has Returning to A-Share Market Eased the Corporate Financing Constraints? Based on the Analysis of Cash-Cash Flow Sensitivity

Abstract

Abstract:

From the dynamic perspective of cross-listing (listing abroad first and then returning to A-share market), this study investi-gates how effectively a company listed in a developed market will alleviate its financing constraints by returning to an emerging market. Based on the paired data of both H-share market and A-share market, the results show that companies that return to A-share market are less sensitive to cash-cash flow than both the companies listed only in H-share market and themselves before returning A-share market, but more sensitive than those listed only in A-share market. And the result remains the same after such factors as model building and sample matching are taken into consideration. This study concludes that returning to A-share market will ease corporate financing con-straints to a certain extent. This conclusion not only provides beneficial reference for Chinese companies' financial policy choice under the overseas listing background and the system construction of the mainland market under the background of the "Shanghai-Hong Kong Stock Connect" program, but also provides strong evidence for further verification of the financing constraint hypothesis in the path of cross-listing.

Key words: returning to A share market, cross-listing, financing constraints, cash-cash flow sensitivity

Liu Xing, Tian Mengke, Zhang Chao. Has Returning to A-Share Market Eased the Corporate Financing Constraints? Based on the Analysis of Cash-Cash Flow Sensitivity[J]. , 2016, 28(11): 40-54.

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