Empirical Research On Influence Of Accounting Information Quality Upon Stock Price Informativeness

Chinese securities market is usually characterized as a policy-oriented market. Stock price moves synchronously because of investors’herding behavior and are often far away from the companies’fundamental value. Stock price informativeness means that firm-specific information is not fully capitalized into stock prices. If stock price shows high informativeness, stock price can fully reflect the firm-specific information.On the contrast, low informativeness means that less firm-specific information are reflected into the stock prices.Stock prices have much more additional information. Stock price informativeness comes from frequent trading, during the process of trading, information capitalized into stock price step by step, and stock price informativeness changes as quality of accounting information changes, that is, stock price informativeness was deeply influenced by the quality of accouting information. So this thesis researches on how the quality of accouting impacts on stock price informationness in Chinese securities market.At first, we expound the relationship between stock price informativeness and the quality of accouting information based on financial market microstructure, as the information is asymmetry, Accounting information quality affecting private information collection and processing cost, has the most direct impaction to stock price informativeness. And then, this paper uses price non-synchronicity as a measure of stock price informativeness. With a sample of1400stocks listed in Shenzhen Stock Exchange during2005-2009, we find that firm-specific information accounts for about51.62%of stock price variation on average and the degree of stock price informativeness increases significantly year by year in the sample period. Further empirical studies show that the quality of accounting information is positively correlated with stock price informativeness. This suggests that the quality of accounting information has an important important impact on stock price informativeness. Moreover, this paper also finds that in2007the implementation of new accounting standards significantly weakened the positive correlation between the quality of accounting information and stock price informativeness. This not only enriches the quality of accounting information and stock price informativeness, but also provides empirical evidence and theoretical basis for our accounting reform and accounting supervision.