Abstract: The number of times and the scale of share repurchases in the Chinese capital markets have multiplied ever since the amended Company Law of 2018 loosened the limits on corporate share repurchases.Share repurchase have become an important financial activity of the companies. As an important institutional reform in China’s capital market, securities margin trading has brought changes to the trading mode of the capital market; will these changes affect the corporate share repurchase behaviors? This is a topic that deserves attention. Taking China’s A-share listed companies from 2007 to 2021 as research samples, this paper adopts the multi-time point difference-in-difference model to empirically test the influence of the margin trading system on corporate share repurchase. The findings show that securities margin trading has a significant promoting effect on corporate share repurchase behaviors. Specifically, after the implementation of the margin trading system, the share repurchase scale of the target company for margin trading is significantly larger than that of other listed companies. The heterogeneity analysis reveals that the promoting effect of margin trading on share repurchase has a significant impact on the companies with low stock liquidity, the companies with non-state-owned property rights, the companies located in areas with lower degree of marketization, and the companies with bear market trends. Therefore, the regulatory authorities should further encourage and guide companies involved in margin trading to implement share repurchases, the policy makers should adjust the restrictions on share repurchases based on the different risk characteristics of the company, and the listed companies should make good use of share repurchases as a kind of risk management tool.

Key words: share repurchase, securities margin trading, short selling mechanism, information asymmetry