The Separation Of Ownership And Control Of Ultimate Controller,Analyst Coverage,and Stock Price Synchronicity

China has been picking up a new round of economic reform since the 18th National Congress of the Communist Party,and successful economic reform is not independent from the reform of capital market.The most important of function of capital market is to guide the social resources flow to the most efficient company that is to create value,so as to improve the efficiency of resource allocation,and one of the most important indicator of the efficiency of the capital market is stock price synchronicity.Many studies have shown that,compared to the United States and other countries which own mature securities markets,the stock price synchronicity of China stock market is higher.Stock price synchronicity reflects the extent of the stock price moving,which depends on the relative quantity of information between company information and market information contained in the share price,and since higher stock price synchronicity shows that stock price failed to reflect the company information,reflecting the lower efficiency China securities market.The quality of information environment of listed company determines the quantity of company information contained in share prices,furthermore,it affects the stock price synchronicity.But the attention of this article is how the phenomena of the separation of control rights and cash flow rights of ultimate controller in listed company affect the information transparency of listed firms and how it impact stock price synchronicity.Foreign researches have showed that,the ultimate controller of listed company realized the separation of control rights and cash flow rights through shareholding structure design so as to acquire the excess control rights over cash flow rights.Excess control rights encourage ultimate controller encroach on small shareholders and investors,thus causing "entrenchment effect",namely,in order to hide their behavior,ultimate controller of the listed company always the manipulate the schedule of information disclosure or announce less and false corporate information,intensifying the asymmetry problem between internal controller and investors and finally deteriorating corporate information environment quality,eventually boosting stock price synchronicity.In addition to the separation of control rights and cash flow rights,analysts play an role of transferring information between listed companies and investors to alleviate the information asymmetry problem,improving the quality of corporate information environment,so the analyst also play an important role in the determination of the information environment.At the same time,the separation of control rights and cash flow rights as well as analysts coverage will influence each other,such as to ease worsening asymmetric information problem,the small shareholders and investors will increase demanding for analysts coverage,and more analysts will supervise the ultimate controller,which will reduce the information disclosure manipulation,then improving corporate information transparency,which in turn will cause lower stock price synchronicity.Therefore,in addition to studying the impact of separation of control rights and cash flow rights as well as analyst coverage on stock price synchronicity,we also focus on the interaction effects on stock price synchronicity between them.We first to review related literature on the relations between two-rights-separation,analyst coverage and stock price synchronicity,and then put forward the research hypothesis according to the information asymmetry and other relevant theory.Based our listed companies of China Small Board Markets from 2006 to 2015 as our data sample,then test of the impact of two-right separation and analyst coverage on stock price synchronicity,furthermore,analyzing the interaction between two-right separation and analyst coverage together.In the fourth chapter,we also carried on the robustness test to ensure our conclusion is robust.We get following conclusions:First there is significant positive correlation between the two-right separation and stock price synchronicity,that is to say,the higher two-right separation always accompanied with the higher stock price synchronicity.Furthermore,the correlation is more significant after rejecting the sample data which two-right separation degree equal one.Second,state-owned property can improve the stock price synchronicity,but compared with non-state-owned companies,the relationship between two-right separation and stock price synchronicity in state-owned companies is weak.Third,analyst coverage is negatively related to the stock price synchronicity,the negative correlation will be significant stronger in non-state-owned enterprises.Forth,analyst coverage has a negative adjust effect on the positive significant correlation between two-right separation and stock price synchronicity,but except state-owned enterprises,where the negative adjustment affect becoming Weak.Based on above conclusions,we put forward some suggestions in order to improve the efficiency of China securities market.