Securities Company's Reputation And Recommend The Stock Value Of The Relationship Between Empirical Research

With the rapid development of China's stock market, more and more securities firms promulgat stock recommendations to investors from various media. Through these activities, securities firms make double win with investors, because the adverse selection of investors which is caused by asymmetry of information between the listed companies and investors are alleviated, the investors' return from investments are increased and the reputation of scurities firms are improved. But in recent years, the events about securities firms violate investors' interest, which appeare repeatedly in the domestic and foreign stock market, indicate that securities firms exist opportunistic behavior to maximise their own interest by using the stock recommendations, which are caused by "conflict of interest"between securities firms and investors. These things indicate that, function of reputation of securities firms can neither enhance yield of investors, nor solve "conflict of interest" between securities firms and investors. Therefore, it is very important to examine the mutual relationship between reputation of securities firms and the value of stock recommendations, not only for the investors as guidable reference to judge the value of stock recommendations which are promulgated by securities firms, but also for the securities supervisory and regulatory commission as policymaking suggestions to enhance supervising and regulating efficiency.Firstly, the article reviews foreign literatures about the value of stock recommendations that are promulgated by securities firms, then summarize the reputation of securities firms mainly producing influence to the value of stock recommendations in two aspects, one is to enhance yield of investors another is to solve "conflict of interest". In the following, the article summarizes the research results which are provided by domestic researchers.Secondly, the article has carried out theoretical analysis on the mutual relationship between the reputation of securities firms and the value of stock recommendations. Through analyzing the influence to the value of stock recommendations, which are produced by opportunistic behavior of securities firms, the article elaborates the function of reputation of securities firms from two aspects. Then the article deduces the mutual relationship between reputation of securities firms and the value of stock recommendations. At last, the article scales the reputation of domestic securities firms by using the scale method popular in foreign similar studies.Thirdly, empirical analysis are conducted on the mutual relationship between reputation of securities firms and the value of stock recommendations, based on which 5 hypothesiss are proposed. Then the article has carried out descriptive analysis and empirical analysis separately to these 5 hypothesiss from selecting 1140 stock recommendations as sample, which are promulgated by 9 domestic securities firms with reputation on different level. At last, the article summarizes the conclusions which are obtained from descriptive analysis and empirical analysis.Finally, according to the conclusions and the actual situation of domestic stock market, the article proposes suggestions for the policy-maker in five aspects, followed by shortages of article, as well as the mainly future research direction.