Empirical Research On The Effect Of Annual Earnings Information Transfers Of Listed Finance Companies In China

Security market is the most important part of market economy, which stands important place of national economy, and the level of its development is a major indicator of the degree of economic development of a country. With the development and strengthening of security market , it has been evident that it is making a lot of contributions to economic development and the allocation of resources in China in the past more than 10 years.The earnings-price relation has been one of the most explored areas of positive accounting research in the recent 30 years. Chinese scholars also find evidence for the information content of earnings in China security market. This paper is focused on a different aspect of earnings-price relation, trying to examine the relation between the announced earnings information and the unannounced stock price. It is named earnings information transfers.The so-called information transfers is defined that in the capital market one company which report was announced would transfer the value-related information to the other companies which reports were not announced .The companies are often referred to related companies or companies in the same industry. The literatures began from the mid-70s of the 20th Century, it is about accounting information on the stock price and it is also the extension of accounting information content.The studies show that companies' financial information can reflect the annual value of information , However, the annual financial reports don't play its due role. One of the reasons to this result is that the capital market is likely to have gained the relevant information from the annual reports which other companies have announced earlier.But if we search the domestic research , the research about information transfers is virtually non-existent so far. The author's purpose is to study the problem and find out whether investors consider the industry factor in the decision of investment, in particular announced earnings whether have been used and referenced by the investors who are in the companies which don't announce their earnings, and how many proportions are they in the decision of investment?This paper uses the method of empirical research and normative research. First the author studies the theories about earnings information transfers, carries on the thorough theoretical analysis to it, then proposes the research supposition and Return Model. Afterwards, collects earnings of listed finance companies in the Shanghai Stock Market and stock prices in the around ten trading days when financial reports of 2004 was announced, carries on the calculation to the primary data and obtains two variables which are The Non-anticipated Earnings and the Stock Cumulative Abnormal Returns Rate, and carries on the multi-angle analysis and the examination through the regression analysis to the earnings information transfers. The results of positive analysis indicate the effect about earnings information transfers of Listed Finance Companies is not obvious in the stock market of our country, but the angle and enlightenment of this research make us have a deeper understanding and the ponder to China's security market and particularly to China's stock market.