The Study on the Impact of the New Third-board Firms Transfer Listing on Financial Flexibility

The transfer and listing of enterprises on the New Third-board is one of the specific reform policies in the capital market in China. As the third-board enterprises are small and medium-sized as well as start-ups, they have a greater need for money, and the policy of restricting their issuance and listing has seriously constrained the financing channels of these enterprises. After the reform, third-board enterprises can apply for transferring to the board for listing after one year of listing and meeting the requirements of the exchange, and do not need to be approved by the China Securities Regulatory Commission. This study wants to use a comprehensive index to examine the financial results of this behavior. Financial flexibility is an important indicator to measure the ability of enterprises to raise funds, and it is appropriate to use it to test the comprehensive effect of the behavior of enterprises. This study selects a sample of 127 firms around 2022 and conducts a difference-in-difference model on their transfer to public listing, obtains the conclusion that transferring to public listing reduces the financial flexibility of firms in the short term, and analyzes the attribution of this result from a theoretical point of view. Finally, this study gives some suggestions for firms that engage in such listing behavior to improve their financial robustness.