Research On The Influence Of Agricultural Policy On Sotck Price Of Agricultural Listed Companies In China

Agriculture industry is the foundation of our national economy. TheChinese government has promulgated a series of polices to support thedevelopment of agricultural industry, which play an important role in theprocess of its advancement. Besides, the supporting method is changing onthe way, from just depending on financial support from government tomarketization support, that is to say, agricultural development attachesmore importance to the support from capital market. Thus, as the excellentperformer, the agricultural listed companies benefit a lot from the policysupport. Through years of subsidies and kinds of support in agriculturalindustry, what breakthrough the agricultural development of China hasachieved, how to assess the policy effect, what aspect should be taken intoconsideration in the policy-making process to promote the industry furtherdevelopment, has achieved wide concern. Based on agricultural industry,this paper tries to examine the policy effects to see whether they meet ourexpectations.At the beginning, this paper reviews the current status of the capitalmarket and agricultural industry to check whether capital market andagricultural policy are fully exerting the support role.Then, we make a practical analysis on the link between stock priceand agricultural policies by introducing methods of identifying ticks andevent study. Research results show that policy effects are obvious butbecome weakened and more short-term gradually due to the routinizationof favorable policy expectations and impact of equity market performance，resulting in “Policy fatigue” to a certain degree. The comparisonresearches also examine the differences of policy effect in stock market, company region, scale and the theme of policy.Moreover, we try to explain the cumulative abnormal returns, whichresult from the policy issue. Based on theoretical studies, we establish amulti-factor model to examine the influencing factors from theperspectives of macro market, industry and firm. We also describe theimpact of both market value and investment demand brought to theagricultural companies by the issue of policy, with the target of conductingquantitative analysis of policy effect.In the end of the paper, according to research findings, policyrecommendations are put forward from the perspectives of government,agricultural listed companies and investors.