Under the Burden : Impact of Social Security Contributions on Stock Market Performance

We attempt to examine the impact of the social security contributions on firms' market performance in the context of the 2010 Social Security Act. Using a sample of Chinese A-share listed firms, we use a difference-in-difference strategy to identify a causal relationship between the impact of social security contributions on firm performance. The empirical results show that imposing social security burdens significantly reduces firms’ market performance, especially for non-SOE firms, firms in competitive industries and firms with strong financing constraints