Proceedings of the 2026 11th International Conference on Financial Innovation and Economic Development (ICFIED 2026)

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The Impact of Margin Trading Mechanism on Stock Mispricing: Evidence from a Difference-in-Differences Approach

Authors
Xue Yu1, Wei Huang1, *
1Jingdezhen University, Jingdezhen, 333000, China
*Corresponding author. Email: huangwei0731@163.com
Corresponding Author
Wei Huang
Available Online 29 April 2026.
DOI
10.2991/978-94-6239-642-5_33How to use a DOI?
Keywords
Margin Trading and Short Selling; Stock Mispricing; Difference-in-Differences Model; Pricing Efficiency; A-Share Market
Abstract

The margin trading and short selling mechanism, as a significant institutional innovation in China’s capital market, has drawn considerable attention regarding its impact on stock mispricing. This study selects China’s A-share market from 2007 to 2017 and employs the pilot implementation in 2010 and subsequent batch expansions of the margin trading system as a quasi-natural experiment. Using a Difference-in-Differences (DID) model, this paper investigates the effect of the margin trading mechanism on stock mispricing. The treatment group consists of stocks included in the margin trading list, while the control group comprises non-listed stocks. Empirical results indicate that the implementation of the margin trading mechanism significantly reduces industry-level mispricing. Robustness checks, including parallel trend tests and Propensity Score Matching (PSM), confirm the findings.

Copyright
© 2026 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2026 11th International Conference on Financial Innovation and Economic Development (ICFIED 2026)
Series
Advances in Economics, Business and Management Research
Publication Date
29 April 2026
ISBN
978-94-6239-642-5
ISSN
2352-5428
DOI
10.2991/978-94-6239-642-5_33How to use a DOI?
Copyright
© 2026 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Xue Yu
AU  - Wei Huang
PY  - 2026
DA  - 2026/04/29
TI  - The Impact of Margin Trading Mechanism on Stock Mispricing: Evidence from a Difference-in-Differences Approach
BT  - Proceedings of the 2026 11th International Conference on Financial Innovation and Economic Development (ICFIED 2026)
PB  - Atlantis Press
SP  - 321
EP  - 327
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-642-5_33
DO  - 10.2991/978-94-6239-642-5_33
ID  - Yu2026
ER  -