Delisting regulation and intra-industry spillover effect: from the perspective of common institutional ownership

This paper investigates the intra-industry spillover effects of new delisting regulations in China, with special attention to the unique role of shell value. We find that the new delisting regulation has an intra-industry spillover effect, which indicates it is effective. After the implementation of new delisting regulations, common institutional investors invest based on firm value rather than shell value. Heterogeneity analysis reveals that these spillovers are most pronounced in the real estate and industrial sectors. Among delisting indicators, ‘net profit after excluding non-recurring gains and losses and revenue’ exhibits the strongest spill-in effect, while ‘closing price’ shows the strongest spill-out effect. These findings provide evidence for the efficacy of delisting regulation in emerging countries and offer insights into the peer effect under delisting pressure.