The Impact of the policies: Evidence from Chinese Ecological Agriculture Companies
DOI:
https://doi.org/10.54691/bcpbm.v38i.3688Keywords:
Ecological agriculture, Stock market, Event study, No. 1 central document.Abstract
Since 1982, affected by the national development direction and policies, companies in related agricultural industries have developed rapidly. One of the standards reflecting the company's development - stock price volatility - has specific industry characteristics. Overall, we found that in the event window, except for 2016 and 2017, the cumulative average abnormal returns showed an upward trend. Especially in 2015, 2018, 2019, 2020, and 2021, since the cumulative abnormal returns are insignificant and the test results are efficiency, it almost proves the policy effect not existing on China's stock market no matter the policy is positive or negative. Finally, through the FAMA five-factor robustness test, we found that the policy effect of ecological agricultural stocks is weak due to the impact of investment factors and profitability, and following previous research, we can conclude that the ecological agricultural stock price is estimated by the investor sentiment and stock valuation. To make a more targeted study on the effects of relevant preferential agricultural policies and national development policies on ecological agriculture, we selected the stock volatility data of 36 listed companies from 2015 to 2021, when the No. 1 central document was released. We used the event study method to use the market model and the FAMA five-factor model to make statistics on the abnormal returns of companies. Compared with the previous research, the heterogeneity of agricultural sub-sectors was obtained by narrowing the sample scope to the ecological agriculture sector in the agricultural sector, and the last policy-related research was further testified.
Downloads
References
Bugu, Z. Y., & Yucheng, H. An empirical analysis of the factors affecting the profitability of China’s agricultural listed companies under the background of agricultural modernization[J]. International Journal of Applied Economics, Finance and Accounting, 2018,2(1):19-26.
Busch, G. Future European agricultural landscapes—what can we learn from existing quantitative land use scenario studies[J]. Agriculture, Ecosystems & Environment, 2006, 114(1):121-140.
Ho K Y, Shi Y, Zhang Z. Does news matter in China's foreign exchange market? Chinese RMB volatility and public information arrivals[J]. International Review of Economics & Finance, 2017, 52(NOV.):302-321.
Dimitri, C., & Effland, A. From farming to food systems: the evolution of US agricultural production and policy into the 21st century[J]. Renewable Agriculture and Food Systems, 2020, 35(4):391-406.
Fan, Q., Mu, T., & Jia, W. Analysis on the Trend and Factors of Total Factor Productivity of Agricultural Export Enterprises in China[J]. Sustainability, 2012, 13(12):6855.
Gao, L., & Kling, G. Regulatory changes and market liquidity in Chinese stock markets[J]. Emerging markets review, 2006, 7(2):162-175.
Plümper, T., & Martin, C. W. Democracy, government spending, and economic growth: A political-economic explanation of the Barro-effect[J]. Public choice, 2003, 117(1):27-50.
Shen, C. H., Bui, D. G., & Lin, C. Y. Do political factors affect stock returns during presidential elections[J]. Journal of International Money and Finance, 2017(77): 180-198.
Wang, F., & Xu, Y. What determines Chinese stock returns[J]. Financial Analysts Journal, 2015, 60(6):65-77.
McLure, M. Pareto, Pigou and third-party consumption: divergent approaches to welfare theory with implications for the study of public finance. The European Journal of the History of Economic Thought, 2010, 17(4):635-657.
Fama, E. F., & French, K. R.A five-factor asset pricing model[J]. Journal of Financial Economics, 2015,116(1), 1-22.
Downloads
Published
Issue
Section
How to Cite
