Administrative division adjustments and stock price comovement: Evidence from the city–county mergers in China

IF 1.9 Q2 BUSINESS, FINANCE China Journal of Accounting Research Pub Date : 2022-06-01 DOI:10.1016/j.cjar.2022.100235

Chun Yuan, Chunxiao Geng, Zhe Li, Yu Sheng, Jie Lv

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引用次数: 3

Abstract

Under the background of Chinese market segmentation, whether government-led administrative division adjustments can promote regional economic integration is a practical issue. Taking interregional firms’ stock price comovement as a micro measurement of regional integration, this paper investigates the regional integration effect of administrative division adjustments, i.e., city–county mergers. We find that stock price comovement between county-level and municipal district-level firms in the merged counties and municipal districts significantly improve after city–county mergers, particularly in regions with a higher degree of market segmentation and lower degree of marketization. We further find that the increase in stock price comovement caused by city–county mergers emerges from the increase in comovement of real activities between firms in the merged counties and municipal districts. Taken together, our results suggest that government-led administrative division adjustments effectively promote regional integration.

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行政区划调整与股价变动:来自中国市县合并的证据

在中国市场分割的背景下，政府主导的行政区划调整能否促进区域经济一体化是一个现实问题。本文以区域间企业股价变动作为区域一体化的微观测度，考察了行政区划调整即市县合并的区域一体化效应。研究发现，市县合并后县域企业与市辖区企业的股价变动显著改善，特别是在市场分割程度较高、市场化程度较低的地区。我们进一步发现，市县合并导致的股票价格变动的增加是由合并县和市辖区内企业间实际活动变动的增加引起的。综上所述，我们的研究结果表明，政府主导的行政区划调整有效促进了区域一体化。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

China Journal of Accounting Research BUSINESS, FINANCE-

CiteScore

4.70

自引率

0.00%

发文量

295

审稿时长

15 weeks

期刊介绍： The focus of the China Journal of Accounting Research is to publish theoretical and empirical research papers that use contemporary research methodologies to investigate issues about accounting, corporate finance, auditing and corporate governance in the Greater China region, countries related to the Belt and Road Initiative, and other emerging and developed markets. The Journal encourages the applications of economic and sociological theories to analyze and explain accounting issues within the legal and institutional framework, and to explore accounting issues under different capital markets accurately and succinctly. The published research articles of the Journal will enable scholars to extract relevant issues about accounting, corporate finance, auditing and corporate governance related to the capital markets and institutional environment.

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