China's Listed Companies' Information Disclosure Violations Early Warning Research

Information disclosure is in fact the most effective means to regulate listed companies, protect minority shareholders and promote market efficiency to allocate resources. A lised company shall ensure that all statutory disclosure information in a ture, integrated, timely and adequate manner. Unfortunately, lots of listed companies repeatedly broke the laws and disclosed their financial information illegally, though it is already seventeen years since our security market was founded. There are few study on prediction of the illegal information disclosure behavior. Although some research institutes and scholars have been going to evaluate the information disclosure level of listed companies, aiming afterward evaluation.This paper is to construct a systematic predicting mechanism of information disclosure. So, this paper selected all the listed companies which received punishments from Shenzhen, Shanghai Stock Exchanges and Securities Regulatory Commission because of illegal information diclosure between 2002 and 2007 as a researching sample. According to certain rules, we also find out a matching sample. Firstly, this paper describes the institutional background of illegal information disclosure of listed companies in China. Secondly, we develop Logistic regression model which including finance, governance and marketing environment characters to find the causes of illegal information disclosure. Thirdly, based on the prior analysis and the status of information disclosure, we develop a index system to predict the illegal information disclosure behavior from the perspectives of finance, market, governance and market environment. Fourthly, this paper develop models to predict the behavior of illegal information disclosure by applying Fisher discriminant, Multi-logistic regression and SVM(Support Vector Machine) respectively. Then, it gives advice on applying nonlinear model to predict the behavior of illegal information disclosure by comparing the results. Lastly, preventive measures are proposed for listed companies to control or settle the behavior of illegal information disclosure in time. Through the research, may obtain the conclusion: It is possible and feasible to use the model to predict the behavior of illegal information disclosure advanced by this paper appraise the information disclosure risk of lised company.