A Research In The Effect Of The Listed Companies' Information Disclosure Quality On The Cost Of Equity Financing : The Difference Between State Holding Enterprise And Non-state Holding Enterprise

Modern society is an information society. Information is the important economic resources which is the basis for the effective functions of the securities market. Among many sources of information, accounting information is undoubtedly one of the most important information. However, some false accounting information of the listed companies had mushroomed in the past few year such as"Yin guangxia","Qiong mingyuan"to the recent"Ordos","Dong sheng Technology"and so on. They were relating to the false disclosure of accounting information. These incidents caused a great impact on the Chinese securities market, also revealed that Chinese listed companies had lots of problems in the accounting information disclosure. The regulations of Chinese securities market have many defects in regulating the accounting information disclosure. How to regulate and perfect the disclosure of accounting information of listed companies to improve the quality of information disclosure has given rise to public concerns and it is the important subject that needs to be solved urgently.This paper take 540 listed companies on A-share in Shenzhen stock market during 2004-2007 as samples which meet the refinancing conditions to find the relationship between the quality of information disclosure and the cost of equity financing. It will be helpful on revealing the actual state of information disclosure of the listed companies and the main factors which affect the cost of equity financing. It also can guide the corporations'behavior of information disclosure to reduce the cost of equity financing to improve the efficiency of securities market.This paper use the 12-term Residual Income Model to evaluate the cost of equity financing and tries to examine the quality of information disclosure of listed companies from both the sufficiency (the quality of voluntary information disclosure) and reliability (the earnings quality). Furthermore, it uses the information examination results to listed companies of Shenzhen stock market as a measurement of overall quality of information disclosure. Meanwhile the cost of equity financing is influenced by many factors which are controlled in the thesis: such as market risk,company size,leverage ratio,B/M ratio,stock concentration ratio etc.The thesis tested the sample from three angles to ensure the conclusions more exactly:①a comprehensive regression: testing all the samples during 2004-2007;②done the overall sample regression test after joined the interactive items of information disclosure quality and the nature of equity.③according to the direction of earnings management divided the sample into two sub-samples: positive and negative earnings management sample to verify the conclusions'stability among the different samples based on joined the interactive items.Depend on the description of variables and sample test, we can draw some conclusions. The higher quality of information disclosure leads to the lower cost of equity financing. Moreover, the study found that the costs of equity financing of state-holding enterprises are higher than other companies. Market is more sensitive to the change of information disclosure quality of state-holding enterprises compare to the non-state holding enterprises. In addition, those listed companies with a higher leverage ratio have a higher cost of equity financing. Finally, the paper proposed a series of policy recommendations based on the research results to guide the behavior of information disclosure of listed companies to help them to reduce the cost of equity financing and improve their financing efficiency.