Bank loan information and information asymmetry in the stock market: evidence from China
Abstract In this study, we use bank loan information to construct proxies for corporate transparency and examine whether these measures reflect information asymmetry in the stock market. Our analysis is based on a novel dataset of stock transactions and bank loans of all publicly listed firms on the...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
SpringerOpen
2022-05-01
|
| Series: | Financial Innovation |
| Subjects: | |
| Online Access: | https://doi.org/10.1186/s40854-022-00367-0 |
| _version_ | 1811254221068042240 |
|---|---|
| author | Yanyi Ye Yun Wang Xiaoguang Yang |
| author_facet | Yanyi Ye Yun Wang Xiaoguang Yang |
| author_sort | Yanyi Ye |
| collection | DOAJ |
| description | Abstract In this study, we use bank loan information to construct proxies for corporate transparency and examine whether these measures reflect information asymmetry in the stock market. Our analysis is based on a novel dataset of stock transactions and bank loans of all publicly listed firms on the Shenzhen Stock Exchange, covering January 2008 to June 2013. We find that firms with outstanding loans have a lower level of information asymmetry in the stock market, whereas firms with defaulted loans have a higher level of asymmetry. Further evidence demonstrates that the effect of loan default on information asymmetry in the stock market is more pronounced when these loans are borrowed from joint-equity commercial banks or multiple banks and when the default occurs under inactive market conditions. Our results remain robust to a series of endogeneity and sensitivity tests and provide suggestive evidence of a close connection between the credit loan and stock markets. |
| first_indexed | 2024-04-12T17:03:08Z |
| format | Article |
| id | doaj.art-24d99bfc6ad44aeb9d5a742e99a547d3 |
| institution | Directory Open Access Journal |
| issn | 2199-4730 |
| language | English |
| last_indexed | 2024-04-12T17:03:08Z |
| publishDate | 2022-05-01 |
| publisher | SpringerOpen |
| record_format | Article |
| series | Financial Innovation |
| spelling | doaj.art-24d99bfc6ad44aeb9d5a742e99a547d32022-12-22T03:24:00ZengSpringerOpenFinancial Innovation2199-47302022-05-018112810.1186/s40854-022-00367-0Bank loan information and information asymmetry in the stock market: evidence from ChinaYanyi Ye0Yun Wang1Xiaoguang Yang2School of Economics and Management, Beijing University of Chemical TechnologySchool of Banking and Finance, University of International Business and EconomicsAcademy of Mathematics and Systems Science, Chinese Academy of SciencesAbstract In this study, we use bank loan information to construct proxies for corporate transparency and examine whether these measures reflect information asymmetry in the stock market. Our analysis is based on a novel dataset of stock transactions and bank loans of all publicly listed firms on the Shenzhen Stock Exchange, covering January 2008 to June 2013. We find that firms with outstanding loans have a lower level of information asymmetry in the stock market, whereas firms with defaulted loans have a higher level of asymmetry. Further evidence demonstrates that the effect of loan default on information asymmetry in the stock market is more pronounced when these loans are borrowed from joint-equity commercial banks or multiple banks and when the default occurs under inactive market conditions. Our results remain robust to a series of endogeneity and sensitivity tests and provide suggestive evidence of a close connection between the credit loan and stock markets.https://doi.org/10.1186/s40854-022-00367-0Bank loan informationInformation asymmetryCorporate transparencyLoan default informationPIN |
| spellingShingle | Yanyi Ye Yun Wang Xiaoguang Yang Bank loan information and information asymmetry in the stock market: evidence from China Financial Innovation Bank loan information Information asymmetry Corporate transparency Loan default information PIN |
| title | Bank loan information and information asymmetry in the stock market: evidence from China |
| title_full | Bank loan information and information asymmetry in the stock market: evidence from China |
| title_fullStr | Bank loan information and information asymmetry in the stock market: evidence from China |
| title_full_unstemmed | Bank loan information and information asymmetry in the stock market: evidence from China |
| title_short | Bank loan information and information asymmetry in the stock market: evidence from China |
| title_sort | bank loan information and information asymmetry in the stock market evidence from china |
| topic | Bank loan information Information asymmetry Corporate transparency Loan default information PIN |
| url | https://doi.org/10.1186/s40854-022-00367-0 |
| work_keys_str_mv | AT yanyiye bankloaninformationandinformationasymmetryinthestockmarketevidencefromchina AT yunwang bankloaninformationandinformationasymmetryinthestockmarketevidencefromchina AT xiaoguangyang bankloaninformationandinformationasymmetryinthestockmarketevidencefromchina |