Market-Based Financing Reforms And Shareholder Valuations: Event Study Evidence From The Chinese Sci-Technology Innovation Board

In this study, the impact of the newly introduced sci-technology innovation board (STAR) on stock valuations in China is examined. Two key event dates are addressed, the STAR guideline announcement date and applicants' prospectus release dates. The results suggest a positive market reaction of relevant listed firms. The difference-in-differences (DID) results for the first event show a reduction in the bid-ask spreads of high-tech firms, as the new policy attracts more analyst research, particularly in-depth research. The DID results for the second event indicate that the information asymmetry for ownership-related listed firms decreases compared to firms within the same industries.