This　study　examines　the　impact　of　price　limit　expansion　on　stock　price　divergence　and　market　efficiency　in　the　Growth　Enterprise　Market　(GEM)　of　the　Shenzhen　Stock　Exchange　(SZSE).　Employing　a　combination　of　Propensity　Score　Matching-Difference-in-Differences　(PSM-DID)　and　event　study　methodology,　we　exploit　the　August　24,　2020,　reform　that　increased　the　daily　price　limit　from　+/-　10%　to　+/-　20%.　Our　results　indicate　that　the　price　limit　expansion　significantly　reduced　stock　price　divergence,　especially　among　larger　firms,　suggesting　an　improvement　in　market　stability　and　price　discovery.　However,　the　reform　coincided　with　increased　information　asymmetry,　possibly　due　to　short-term　speculative　activity　and　intensified　informed　trading.　Event　study　results　reveal　an　initial　surge　and　subsequent　decline　in　cumulative　abnormal　returns,　reflecting　investor　sentiment　fluctuations　around　the　reform.　These　findings　contribute　to　the　literature　by　offering　new　stylized　facts　about　price　limit　reforms　in　emerging　markets　and　highlighting　the　complex　interplay　between　regulatory　change,　investor　behavior　and　market　structure.