Abstract Using the data of non-financial listing firms from 2007 to 2019, this study empirically tests the impact of the margin trading system on the firm diversification. This study finds that the margin trading system can inhibit the firm diversification, especially non-related diversification. The mechanism analysis shows that margin trading system can play a role in external governance and financing by reducing agency costs, alleviating executives’ overconfidence and financing constraints. Heterogeneity analysis shows that for the firms with less redundant resources and in the higher competition environment, the margin trading system can inhibit the diversification more significantly; both the financing and the securities lending mechanism inhibit the diversification. The economic consequence test finds margin trading system positively regulates the relationship between firms’ diversification and their values.
ZHANG Ziyao,QIN Jiaqi,XIE Yanxiang等. Research on the Impact of Margin Trading System on Firm Diversification[J]. Chinese Journal of Management, 2023, 20(9): 1398-.
