The Research Of The Effects Of The Media Coverage On Stock Price Informativeness

The stock price informativeness is that the corporate specific information contained in the stock price. It is the symbol of the efficiency of capital market, because only contains more corporate specific information, the stock price can more accurately reflect the actual value of the company and influence the efficiency of resource allocation. However, as a new capital market, China’s stock price informativeness is still in a low level compared with the developed countries, the phenomenon of "stock price moving in the same direction" is very serious. Therefore, how to improve the stock price informativeness is an important and urgent problem.Nowadays, The media coverage on listed firms is increasingly widely and thorough. As an external law power, media has a positive role in corporate governance and so on which has proven by many scholars. In addition, the capital market essence is an information market, and the information is the basic of the investors to judge the value of the corporate in the capital market. However, the media coverage can reduce the information asymmetry between the external investors and company internal, it can also help the investor to gain the information of the company. Thereby, the media coverage can reduce the enterprise behavior of manipulating accounting information. So, what will be the impact of media coverage on China’s stock price informativeness because of the positive role on the corporate governance and information asymmetry? On the basis of the quality of accounting information, we try to study the relationship between media coverage and stock price informativeness.Using a sample of firm-year observations during the period of 2012-2014, on the basis of the quality of accounting information, we studied empirically the relationship between media coverage and stock price informativeness. We find that the media coverage can significantly increase the informativeness of stock price through increasing the quality of accounting information.This study can rich the realization of the media coverage, the quality of accounting information and the stock price informativeness. What’s more, as a result, our findings can also provide a new idea to increase the stock price informativeness of China and the efficiency of resource allocation.