Research On The Impact Of Stock Financing Transaction On The Volatility Of China's Stock Market

On March 31,2010,China officially launched the stock financing transaction and short selling system.The system has developed rapidly in ten years and has become a force that cannot be ignored in China's capital market.At the present stage,most of the relevant researches are mainly focused on the impact of stock financing transaction and short selling system on the stock market,but little attention has been paid to the impact of stock stock financing transaction,which accounts for a large proportion of the two financial systems,on the stock market fluctuation.This is precisely the issue that securities researchers and regulators are very concerned about,and is of great significance to the adjustment of their investment strategies.And relevant research conclusions can provide reference for regulatory policy makers.In particular,the formulation of financing policies may affect the smooth operation of the entire financial market and play a role in preventing and resolving systemic risks.Whether domestic scholars or foreign scholars have reached a unified conclusion on the impact of stock financing transactions on stock market fluctuations.Nowadays,relevant researches in academia mainly focus on the short selling mechanism affecting the volatility of the stock market,i.e.whether short selling has aggravated the volatility of the stock market.There is little research on stock financing transactions,but this is also in line with the unbalanced development of stock financing transaction in China.This situation is affected by the national conditions.Foreign countries mainly implement the margin system,which is particularly similar to our financing transactions.What is the impact of stock financing transactions on China's stock market and is the level of impact consistent at different stages? These problems need to be explored in the article.This paper first sorts out the research conclusions of previous scholars and makes a comprehensive analysis of them.After summing up the previous experience,this paper gives a general introduction to the relevant concepts and theories of stock financing transactions,in order to deeply understand the theoretical basis of stock financing transactions.This paper analyzes the mechanism of the stock financing transaction's influence on the stock market fluctuation from the positive and negative aspects.In the empirical stage,the disadvantages of the previous research index selection are analyzed,and a stock financing index is compiled by selecting a plurality of financing trading stocks and used as the research index.Using the index data of stock financing index in the decade 2010-2019,GARCH and VAR models are used to analyze the relevant data,revealing the general relationship between stock financing transactions and the fluctuation of China's stock market,describing the relevant impact process in stages and analyzing the relevant reasons.The results show that stock financing transactions do have an impact on volatility,but the extent of the impact is not significant.The results of variance analysis also verify this point.In fact,according to the image of impulse response function,we judge that the stock financing transaction has slowed down the fluctuation of the stock market to a certain level.In the bull and bear market phase,the closing price increases and decreases of the financing index and the China Securities A-share index in the early and late phases are compared respectively,and the conclusion is verified.In the middle and early stages of the bull bear market,financing transactions actually helped rise and fall,but in the later stage they suppressed the rising or falling prices,which is also corresponding to the real financing market.Finally,on the basis of the research conclusions,we put forward some relevant policy suggestions,such as,leverage ratio is linked to the increase in index,setting a timing node to reduce financing costs,providing a certain degree of autonomy for compliant comprehensive securities dealers,deploying the short selling system in advance,and completely cutting off off-site stock allocation to reduce stock market volatility.I hope this article will play a certain role in personal investment,securities companies making rules,regulatory authorities adjusting and improving policies,etc.