Research On The Impact Of Capital Market Opening-up On Enterprise Investment Decision

The capital market opening-up is an important symbol of a country’s financial development.In June 2017,MSCI enterprise officially announced that A shares would be included in the MSCI index,which is an important milestone in the process of Chinese capital market opening-up,bringing a further opening of domestic capital market to the outside world.A shares,after the inclusion,attract not only more attention but also more capital flow from overseas individual and institutional investors.These investors own more mature investment ideas and more professional investment knowledge,as well as obvious advantages in information collection and processing.Those above form supervision pressure on the operation of enterprises.At the same time,enterprises get new opportunities while their financing constraints are relieved.Therefore,in the face of more opportunities and challenges,how related enterprises operate and develop is the focus of our attention.More importantly,as the core of development,what will be the impact of enterprise investment? whether the inclusion plays a positive role in Chinese real economic development needs to be deeply analyzed.All the stocks,in Shanghai and Shenzhen-Hong-Kong Stock Connect,can be naturally divided into experimental group and control group due to their partial inclusion,so that it can be regarded as a quasi-natural experiment.This paper,from the perspective of Chinese A shares being included in MSCI index,discusses the impact of capital market opening-up on enterprise investment decision,using the financial data of listed enterprises from 2014 to 2019 and based on the difference-in-difference model.The study finds that their inclusion in MSCI index can improve the investment level but reduce the investment efficiency,and the types of enterprises significantly affected are not exactly the same.Specifically,the inclusion mainly affects the investment decisions of enterprises with overseas business and management shareholding.Among these enterprises,the investment level of them with insufficient investment increases significantly,while the impact on investment efficiency is not significant;The impact on investment level of them with over-investment is not significant,while the investment efficiency decreases significantly.Overall,the inclusion has improved the investment level of enterprises with overseas business and management shareholding,while their investment efficiency shows a downward trend.Therefore,its positive effects on the development of Chinese capital market needs a longer-time observation.The empirical analysis of the A shares’ inclusion in MSCI index enrichs the researches on the economic consequences of capital market opening-up,and provides a certain theoretical basis for the management and construction of domestic capital market.