The Effect Mechanism Of Innovative Efficiency On Stock Returns

There is an increasingly competitive market under the trend of economic globalization, especially after China’s accession to WTO, domestic enterprises not only have to face competition from domestic enterprises in all regions, but also by the challenge from international multinationals. These companies have more advanced technology, better management and more sufficient funding, therefore, domestic enterprises have to face a more grim situation.From the development process of enterprises, improve the innovation ability of enterprises will bring a steady stream of power, only effective and continue to promote technological innovation, form the core competitive advantage, enterprises can be invincible in the market and achieve sustainable development. Therefore, more and more companies realize the importance of innovation. In recent years, research on companies innovation became the focus of economic circles.Existing literature in general research on innovative output performance or efficiency factors a, few scholars enterprise innovation activities into the capital markets, research the relationship between companies innovation and stock returns. Therefore, this article from the perspective of information asymmetry, study the relationship between innovation efficiency and the stock returns, and further analysis of the regulation of financial analysts on IE-return relation. Innovation activities have large initial investment, and there are high transaction costs and adjustment costs, therefore, innovation activity may cause a decline in corporate financial indicators, affect the company’s profitability. From the view of investors, declining financial indicators will send a negative message, furthermore, innovation activities is characterized by uncertainty and high risk, make it difficult to interpret innovation capability of enterprises, so as to form a special kind of information asymmetry, this information asymmetry can lead investors to corporate innovation activities have a more negative attitude, and affecting the company’s stock returns. In order to reduce the information asymmetry between investors and companies, the paper further analyzes the regulation of financial analysts in the market.Based on the above issues, putting manufacturing listed companies in stock market in2005 to 2013 as research samples, proposed the use of innovation efficiency, the output of innovation (patents) and innovation inputs (R&D) of ratio as a measure of companies innovation capability(Li,2013), mainly study the following three questions:first, innovative efficiency’s influence on operating performance of China’s manufacturing listed companies; second, innovative efficiency’influence on stock returns of China’s manufacturing listed companies; third, financial analysts adjustment of IE-returns relation of China’s manufacturing listed companiesThrough empirical testing, we find:innovation efficiency have significantly negative correlation with enterprises operating performance and stock returns. Financial analyst attention will reduce the information asymmetry between investors and companies, thereby reducing negative correlation between innovation efficiency and stock returns. In addition, results of this study can not only provide the basis for decision-making shareholders of listed companies, the value can be a deeper understanding of innovation activities, but also that the regulatory authorities to provide a reference, so that it can provide a more accurate guide for businesses, better support.