| China’s capital markets began to open up gradually and cautiously in the 1990 s and with the implementation of the “Land-Hong Kong Stock Connect” policy,China’s capital markets have entered a two-way opening phase.The problem of principal-agent problems is widespread among listed companies and poses a serious threat to the normal operation of enterprises.Current academic research on capital market liberalization focuses on macroeconomic consequences and micro-behavior of enterprises,while research on whether the two-way liberalization policy of the“Hong Kong-Land Link” reduces the agency costs of enterprises is rare.Capital market liberalization can improve corporate agency problems and reduce agency costs through the governance and information mechanisms.Therefore,this paper investigates the impact of capital market liberalization on the agency costs of firms in the context of the “land-port link”.Based on theories such as information asymmetry theory,principal-agent theory and catering theory,this paper constructs a multi-period double difference model to investigate the impact of capital market liberalization on the agency costs of firms by using a quasi-natural experimental platform for the implementation of the “Land-Hong Kong Link” policy.On this basis,we further investigate the impact of capital market liberalization on the agency costs of enterprises.On this basis,we further investigate the impact of capital market liberalization on the agency costs of firms with different property rights and the impact of capital market liberalization on the agency costs of firms with different equity concentrations.Finally,this paper investigates the mediating effect of analysts’ attention in the impact of capital market liberalization on the agency costs of firms.It is found that:(1)after the implementation of the “Land-Hong Kong Link”policy,the first type of agency costs of the experimental group are significantly smaller than the first type of agency costs of the control group;after the implementation of the “Land-Hong Kong Link” policy,the second type of agency costs of the experimental group are significantly smaller than the second type of agency costs of the control group.(2)Compared with non-state-owned enterprises,the capital market reduces the first type of agency costs of state-owned enterprises more significantly;compared with state-owned enterprises,the capital market reduces the second type of agency costs of non-state-owned enterprises more significantly;(3)Compared with enterprises with high equity concentration,the capital market reduces the first type of agency costs of enterprises with low equity concentration more significantly;compared with enterprises with low equity concentration,the capital market reduces the second type of agency costs of enterprises with high equity concentration more significantly;compared with enterprises with low equity concentration,the capital market reduces the second type of agency costs of enterprises with low equity concentration more significantly.(4)analysts’ attention plays a partially mediating role in the effect of capital market opening on the first type of agency costs of firms;analysts’ attention plays a fully mediating role in the effect of capital market opening on the second type of agency costs of firms.There are three possible innovations in this paper.First,this paper considers both the “Shanghai-Hong Kong Stock Connect” policy and the “Shenzhen-Hong Kong Stock Connect” policy,i.e.,it studies the impact of the implementation of the“Land-Hong Kong Stock Connect” policy on the agency costs of enterprises,avoiding the existing studies that only consider the “Shanghai-Hong Kong Stock Connect” policy.This avoids the “one-size-fits-all” model of considering only the“Shanghai-Hong Kong Stock Connect” policy or the “Shenzhen-Hong Kong Stock Connect” policy.Secondly,a multi-period double difference model is used to study the impact of the implementation of the Land-Hong Kong Stock Connect policy on the agency costs of enterprises,which adequately addresses the endogeneity problem of previous studies related to capital market liberalization.Thirdly,existing research suggests that capital market liberalization can increase the number of analysts who pay attention to the underlying companies of the LHC,and that analysts’ attention can play a monitoring and governance function on the companies.This paper further investigates the mediating effect of analysts’ attention on the agency costs of firms in the context of the implementation of the “Hong Kong-Land Link” policy. |
