Analysis Of Correlation Between Corporate Governance And Stock Price Volatility

Since 90s of 20th century, with the rapid development of China's stock market, stock market has already become one of the most important investment channels for the majority of investors, especially for the medium and small investors. But while developing rapidly in stock market, a lot of problems have been exposed in Chinese listed companies in the respect of corporate governance, which do grave harm to the interests of medium and small investors, and it is attracting increased stock investors'attention on the problem of corporate governance in Chinese listed companies. However, up to now, there are almost no association studies between the level of corporate governance of listed companies and the fluctuations of stock prices. Therefore, the subject is worth us to do further study.This article, according to relevant theories of corporate governance and relevant data of stock market, analyzes the association between the corporate governance level of listed companies and the fluctuations of stock prices. On the one hand, the article expects to provide some reference suggestions on the decision-making of medium and small investors. On the other hand, the article expects to promote the healthy development of stock market through improving the corporate governance level of listed companies. With an analysis of the theoretical basis and appraisal research status of the corporate governance, the article chooses the appraisal System of corporate governance, which fit the actual situation of Chinese listed companies. Taking manufacturing and retail industries as an example, and selecting 60 stocks as the samples, according to the relevant date of the two industries in year 2007, by using economic statistics software, the article carries on the empirical analysis about the association between the corporate governance level of listed companies and the fluctuations of stock prices.The empirical results shows that there is a significant correlation between the corporate governance level of listed companies and the fluctuations of stock prices, which indicates that the higher the corporate governance level, the greater stock price fluctuations in a long term.