Efficient Market Hypothesis And Full Disclosure Of Information

Stock market's position and influence become more and more important in market economy as it rapidly develop. Within the stock market, related interest parties (including investors, corporate managers and regulatory agency, etc.) have interacted relations. A sound and efficient stock market has great significance in accelerating capital flow and efficiently allocating capital in the whole economy.Western scholars has brought forward Eff cient Market Hypothesis (EMH) since 1960s. EMH embodied competitive equilibrium which is pursued by economists. In fact, EMH is extension of Adam Smith's "Invisible Hand" in financial markets. Academe gave great emphasis to EMH, and made EMH be the bedrock of the theory and practice of modern finance and accounting. But debate surrounding EMH has not ever ceased since its appearance. The debate greatly improved theory of EMH and empirical research, and sped other subject's advance also. And the argument whether the market is efficient has been the most impressed topic and never had verdict ever since. Unfortunately, most current research only simply assumed the market wa; efficient and made an efficient market be their starting point of research, but l.ttle exploration has been made to the essence of EMH.Furthermore, when there has recently been a burst of accounting fraudulent scandals in American capital market which was said to be the most sound market in the world, people began to question the efficiency of American capital market. This fact urged us to explore an issue which was the root of the matter: If even American capital market could not attain effici 3nt state, than what is the sense of researching the market efficiency? what the rrarket efficiency means? What are the preconditions of market efficiency?The title of this dissertation is "Efficient Market Hypothesis and Full Disclosure of Information". The dissertation consists of six chapters, with the arrangement of each chapter as follows:Chapter 1-The Characteristics of Stock aid Stock MarketChapter 2- Efficient Market Hypothesis-Fundamental TheoreticalAnalysisChapter 3-Efficient Market Hypothesis-Further AnalysisChapter 4-Enhancing the Market's Efficiency via Full Disclosure ofInformation-The Manner of Information Disclosure and the Incentives ofVoluntary Information DisclosureChapter 5-Enhancing the Market's Efficiency via Full Disclosure of Information-The Form and Content of Information DisclosureChapter 6 ?Market Efficiency and Full Disclosure of Information-Summary and Consideration of Chinese PracticeThe main discoveries of this dissertation are as follows:1. The stock exchange market is only a place where wealth is transferred and redistributed. But if corporations want to successfully raise capital from investors by issuing stocks, there must exist a stock exchange market and the exchange market must operate soundly. And in the stock exchange market, there must be investors (Noise Traders and Arbitrageurs) who have opposite expectation of the future trend of stock price at the same time, if not, the dealing in stock can not be accomplished, and the stock exchange market can not operate soundly.2. The price of stock can reflect information and fluctuate correspondingly, because investors make buy-and-sell decisions on the basis of relative information according to their endowment and preference. But we must be aware that stock has no value in itself because stock dissociate from corporation and it is only a voucher of the right of future yields. Thus, lacking comparative benchmark of value result in the volatility of stock price, and imply that the key problem of attaining market efficiency is whether investors can obtain enough information and made practical investment decision based on the information. If investors can not obtain relative information or be irrational when making investment decision because of the bias of psychological cognition, the price of stock will not fully reflect all public information.3. An efficient market has great significance from the po...