JOURNAL ARTICLE

Exploring the multifaceted impacts of convertible bond issuance on stock market quality: Evidence from China.

  • Published In: Journal of Financial Research, 2026, v. 49, n. 1. P. 154 1 of 3

  • Database: Business Source Ultimate 2 of 3

  • Authored By: Xin, Jianxuan; Ye, Qiang; Xia, Hao 3 of 3

Abstract

We investigate how convertible bond issuance impacts stock market quality across four dimensions: liquidity, price efficiency, excess returns, and volatility, using Chinese market data. Findings reveal that convertible bond issuance enhances liquidity and price efficiency but also leads to increased volatility and reduced excess returns. We identify two primary mechanisms: first, the conversion of convertible bonds impacts all four dimensions of market quality; second, high‐frequency trading of these bonds reduces stock market volatility, mitigating the overall effect. Heterogeneity analysis indicates that these effects are stronger among firms with smaller market capitalizations, lower‐rated convertible bonds, and during negative sentiment periods. [ABSTRACT FROM AUTHOR]

Additional Information

  • Source:Journal of Financial Research. 2026/03, Vol. 49, Issue 1, p154
  • Document Type:Article
  • Subject Area:Business and Management
  • Publication Date:2026
  • ISSN:0270-2592
  • DOI:10.1111/jfir.12445
  • Accession Number:192205188
  • Copyright Statement:Copyright of Journal of Financial Research is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

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