Recently, according to the announcement of the results of the 13th Social Science Outstanding Achievement Award, the monograph " Short Selling and Margin Trading in China: lnstitution and Market Effects" written by Professor Zhisheng Li, director of the base, won the first prize.

Overview of the monograph:

As an important link in the financial innovation chain, margin trading is an indispensable part of the market. On the one hand, margin trading creates sufficient liquidity for the market through credit trading, on the other hand, it also provides a new price discovery mechanism for the market. First of all, this book introduces the practice process, model and international comparison of margin trading in A-share market from the perspective of institutional background, and analyzes the dynamic development of margin trading from the perspective of the target, investors and market transactions. Secondly, this book adopts normative empirical research paradigm to systematically explore the market effects and economic consequences of margin trading from the perspectives of price efficiency, market stability, corporate governance, information governance and so on.

Based on the practice of China's capital market, this book closely combines academic research with China's problems, and clarifies the impact and internal mechanism of margin financing, a representative capital market innovation, on asset pricing, information environment and corporate governance from the perspective of policy evaluation. On the one hand, these studies are helpful to summarize "China's experience", have reference value for the development and improvement of China's capital market, and have clear policy reference significance for the regulatory authorities. On the other hand, it will also help spread the "Chinese experience" and provide reference for the capital market practice and institutional innovation of other countries.

As a mechanism with the characteristics of leverage and short selling, margin financing has a typical representative significance. On March 31, 2010, the Shanghai Stock Exchange and Shenzhen Stock Exchange launched the pilot margin trading and began to accept the declaration of margin trading and short trading by the pilot brokerages, marking the official establishment of the short selling mechanism in China's A-share market. Since the pilot business was launched, margin trading and short selling in Shanghai and Shenzhen stock markets have made great progress. By December 2017, more than 90 securities brokerages have been approved to participate in margin trading and short selling business, and the number of business departments carrying out margin trading and short selling business is 10,024, and the number of margin trading and short selling customers is 4.6 million. From the perspective of trading volume, by December 2017, the balance of margin trading in Shanghai and Shenzhen continued to increase to 1,026.264 billion yuan, of which the balance of financing was 1,021.758 billion yuan and the balance of margin trading was 4.506 billion yuan.

Chinese capital market has many different characteristics from mature market. From the perspective of investor structure, individual investor is always the main body of Chinese market, and the participants of various kinds of innovative financial transactions are mainly individual investor. Taking the stock market and margin trading as an example, by the end of 2016, 49.463,300 of the 50.436,600 investors in the stock market were natural persons (98.07%), and 424,900 of the 424,900 investors who opened margin trading credit accounts were individual investors (99.76%). In the actual market, individual investors often show the characteristics of information asymmetry, lack of investment knowledge, weak risk awareness and so on. They know little about the structural characteristics and investment methods of innovative financial products, and blindly participate in trading, resulting in a large amount of wealth loss. In addition, due to the large number of individual investors, irrational behavior may cause market pricing bias and irrational volatility, and even magnify the risk of capital market innovation in extreme cases, leading to market collapse. Therefore, using scientific academic paradigm to systematically analyze the market effect of margin trading will help us sum up the experience and deficiencies of these market practices, and provide theoretical and factual basis for the formulation and adjustment of relevant policies. In addition, in recent years, the practice and experience of China's financial market have been widely concerned around the world. This study is also conducive to the dissemination of the "Chinese experience" and provides references for the capital market practice and institutional innovation of countries around the world.

Different from the developed countries, there are many ways of short selling. As the emerging capital market, margin trading is the only way of short selling for specific stocks at present. More importantly, only part of the stock market in our country is the margin trading target, and most of the other stocks can not be sold short. Since the launch of the margin trading pilot project, the margin trading shares in our country have been finely tuned many times. All these provide a good environment for studying the market effect of credit and short selling. On the one hand, it is conducive to controlling the interference of other short selling approaches to relevant research results. On the other hand, it is conducive to obtaining more robust results through comparative analysis and event analysis.

This book systematically studies the market effect of margin trading from the perspective of policy evaluation. This book is divided into seven chapters: The first chapter introduces our margin trading system background; Chapter 2 analyzes the current situation and dynamic changes of margin trading from the perspective of target investors and market transactions. Chapter 3 summarizes the research status of financial innovation in securities market. Chapter 4 and Chapter 5 discuss the effect of margin trading on pricing efficiency and price stability. Chapter 6 analyzes the corporate governance effect of margin lending from the perspective of cash holding value and earnings management; Chapter 7 studies the role of internal information governance and external information governance of margin trading based on the quality of information disclosure of listed companies and the quality of analyst prediction.

Description of the award:

Hubei Province Social Science Outstanding Achievement Award is a provincial award established by Hubei Provincial People's Government, which is evaluated every two years. It is the highest level award of social science in Hubei Province. The selection of the 13th Hubei Provincial Outstanding Achievement Award for Social Sciences was launched in January 2022 to select the achievements published by Hubei Provincial philosophy and social sciences between 2019 and 2020. According to the Implementation Rules of the Interim Measures for Awarding Outstanding Achievements in Social Sciences of Hubei Province and the Implementation Plan for the Evaluation and Award of the 13th Outstanding Achievements in Social Sciences of Hubei Province, after the initial evaluation, re-evaluation and final review procedures, a total of 260 achievements to be awarded in the 13th Provincial Social Sciences Awards have been evaluated, and our school has won 2 first prizes.