Research On The Impact Of Capital Market Opening On Corporate Financial Risk

At present,the triple pressures faced by China’s economic development,such as shrinking demand,supply shocks and weakening expectations,have aggravated the financial risks of enterprises.Financial risk is related to the daily production and operation of an enterprise.The stable development of an enterprise is also largely constrained by its ability to control financial risk.Therefore,under the new situation,how to effectively prevent and resolve the financial risks of enterprises and protect the macroeconomic development has become an important issue facing the government.At the same time,continuing to promote the opening of capital markets is an important strategic measure of China’s high-level financial opening,and also an inevitable trend of economic development.The report of the 20 th National Congress of the Communist Party of China stressed the need to promote high-level opening up.As one of the landmark events of China’s capital market opening to the outside world,the implementation of the "Mainland-Hong Kong Stock Connect" trading system has promoted the substantial leap of two-way connectivity between China’s domestic capital market and overseas capital markets,and has also aroused widespread concern in the academic community.Relevant research literature has extensively discussed the impact of capital market opening on enterprises.However,the impact of the "Mainland-Hong Kong Stock Connect" trading system on the financial risk of enterprises is still lacking of discussion.Therefore,this thesis will deeply study how the opening of capital market affects the financial risk of enterprises.This thesis constructs a quasi natural experiment based on the implementation of the "Mainland-Hong Kong Stock Connect" trading system as an important policy impact of capital market opening,and uses a multi period double difference model to empirically examine the impact of capital market opening on corporate financial risk and its channels.The research believes that the implementation of the "Mainland-Hong Kong Stock Connect" trading system has significantly reduced the financial risk of enterprises.This conclusion is still valid by changing the enterprise financial risk measurement method,PSM+DID estimation,placebo test and sample replacement.It is further found that the opening of the capital market has optimized the debt structure of enterprises.Even if the proportion of enterprise operating debt is reduced,the proportion of financial debt is increased,and the dependence on short-term loans is reduced,the profitability of enterprises is increased.From the perspective of mechanism testing,the main channels for the implementation of the "Mainland-Hong Kong Stock Connect" trading system to reduce the financial risk of enterprises are to ease the constraints of enterprise financing,improve the transparency of enterprise information and reduce the cost of enterprise entrustment agency.From the perspective of expansion analysis,compared with enterprises in low technology industries,enterprises in high marketization areas,capital intensive enterprises,enterprises with high governance level and enterprises with ten active shares,the "Mainland-Hong Kong Stock Connect" trading system plays a more significant role in reducing the financial risks of enterprises in high technology industries,enterprises in low marketization areas,labor-intensive enterprises,enterprises with low governance level and enterprises with non ten active shares,The impact on enterprises with different internal supervision intensity is not significant.Finally,based on the research conclusions obtained in this thesis,policy suggestions are put forward from various aspects,such as expanding the scope and scale of the "Mainland-Hong Kong Stock Connect",focusing on the differentiation of the implementation of the "Mainland-Hong Kong Stock Connect" policy for different enterprises,the construction of enterprises’ own capabilities,and the construction of enterprise financial risk early warning system,so as to promote enterprises to optimize their own financial behavior and reduce financial risk by taking advantage of the good opportunity of capital market opening.Compared with previous studies,this thesis expands the research perspective of the micro enterprise effect of capital market opening and the influencing factors of enterprise financial risk.At the same time,it also provides theoretical and empirical support for China to steadily promote the opening of the capital market to enhance the ability of enterprises to resist risks.