Weibo, Analysts' Earnings Forecast And The Cost Of Equity Capital

The ways in which the management of the company communicates information to the outside have an important impact on the capital market.In recent years,the interactive development of the media,information technology and capital market has changed the way enterprises produce,disseminate and process information.Especially the use of weibo has upended the traditional way of information disclosure.As of the third quarter of 2016,the number of weibo subscribers has reached 297 million,of which over 10 billion monthly readings of financial and economic content have been made.Weibo information disclosure is one of voluntary information disclosure,which can provide more information on the basis of compulsory disclosure,effectively reducing the degree of information asymmetry.Foreign scholars have long been concerned about the impact of information disclosure on the cost of equity capital,most of them believe that information disclosure can effectively reduce the cost of equity capital.The relative development of the domestic securities market is relatively slow,so the domestic scholars started these research relatively late and they haven't reached an agreement yet.At present,the domestic capital market investor protection mechanism is not perfect,and information disclosure is conducive to the protection of investor rights,coupled with the domestic listed companies preferred equity financing.Therefore,it is very meaningful to study the relationship between weibo information disclosure and equity capital cost.In this paper,we first use the effective market hypothesis,information asymmetry theory,signal transmission theory and principal-agent theory to analyze the relationship between the voluntary information disclosure of weibo and the capital cost.This paper mainly studies the listed companies of A-share main board,SEM board and GEM board in China from 2010 to 2015.And we examined whether the cost of equity capital is different between enterprises that launched weibo and disclosed information to those who didn't.We also studied the interaction between weibo information disclosure and analysts' earnings forecast both affect the cost of equity capital.In the study of weibo information disclosure,this paper also distinguished the different influences of the four information transmission paths on the cost of equity capital cost,they are retweet,comment,posting original miroblog and sending hyperlink.Finally,based on the results of empirical test and the combination of theoretical analysis,the relevant research conclusions and suggestions are put forward.It is found that:(1)the equity capital cost of enterprises with weibo is lower than those enterprises that do not launch weibo to disclose information.(2)companines that have launched weibo can reduce the cost of equity capital by retweeting,commenting on and sending out the original message.(3)in the case of other conditions,the impact of weibo information disclosure on the cost of equity capital is more significant for enterprises with larger errors or dispersion of earnings forecasts.With the increasing popularity of weibo information disclosure in listed companies,we put forward corresponding suggestions:(1)listed companies and relevant government departments should work together to accelerate the construction of weibo information disclosure platform(2)enterprises should correctly understand the role of weibo information disclosure path and reduce the negative impact of weibo information disclosure.(3)regulators should strengthen the control of weibo,make rules and laws to regulate and guide the weibo information disclosure of listed companies.