Can The Opening Of Capital Markets Curb Excess Goodwill?

In order to conform to the development trend of economic globalization and promote the further deepening of China’s supply-side structural reform,the opening of the capital market has become the only way for national development in the new era.The Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect trading system is the starting point for China’s capital market to achieve two-way interconnection,and its fundamental purpose is to improve the structure of China’s capital market and make the capital market better serve the development of the real economy.Whether the opening of the capital market has the effect of corporate governance is an important issue in China’s capital market reform.At present,the prevalence of high premium M&A in the capital market has caused the total amount of goodwill of M&A enterprises to soar year after year.The high amount of goodwill risk will damage the healthy operation of the market order and cause chain systemic risk.Therefore,this paper takes the Shanghai-Shenzhen-Hong Kong Stock Connect trading system as an exogenous event to study the effect of capital market opening on excess goodwill of enterprises.This paper combs the domestic and foreign research literature on the opening of capital market and excess goodwill,summarizes and reviews the opening process of China’s capital market since its establishment,analyzes the logical relationship and impact mechanism between the opening of capital market and excess goodwill on the basis of information asymmetry theory,principal-agent theory and investor cognitive hypothesis,and puts forward research hypotheses.Taking the financial data of A-share listed companies from 2010 to 2021 as the research sample,the sample is divided into the experimental group and the control group according to whether they are the target enterprises of the Shanghai-Shenzhen-Hong Kong Stock Connect,and a multi-point double difference model is designed to empirically test the impact mechanism of capital market opening on the excess goodwill of enterprises,as well as the impact effect of capital market opening on the excess goodwill of enterprises under different equity nature and legal environment.The research shows that: first,the opening of capital market can significantly inhibit the level of excess goodwill of enterprises;Secondly,the inhibition effect of capital market opening on excess goodwill is more obvious in non-state enterprises;Thirdly,the inhibition effect of capital market opening on excess goodwill is more obvious in enterprises in areas with poor legal environment.After using the replacement variable measurement method,Heckman two-stage regression,PSM-DID method,placebo test and other robustness tests,the research conclusions remain unchanged.In the further analysis,the function path of capital market opening to restrain excess goodwill is verified.The intermediary effect analysis shows that capital market opening can reduce the level of excess goodwill by improving the information environment of enterprises and improving the level of corporate governance.In order to give full play to the corporate governance effect of the opening of the capital market,the policy recommendations in this paper include: First,China should accelerate the improvement of the financial market system,increase the opening of the capital market to the outside world,improve the construction of the overseas capital supervision system,and actively explore a new mode of opening the capital market to the outside world;Second,strengthen the supervision of mergers and acquisitions of listed companies,improve the quality of enterprise information disclosure,and reduce the damage of information asymmetry to the capital market and investors;Third,improve the basic structure of China’s capital market with retail investors as the main body,strengthen education and guidance for domestic investors,and advocate rational investment.