The Effect Of Institutional Investors' Site Visit On The Effectiveness Of Capital Market Information

Information efficiency of capital market has always been a hot issue in the field of financial research.Capital market is essentially an information market,in which information is the most important factor to determine the price of assets.And the validity of the information is reflected in the timely reflection of the asset price related to the.value of the asset.However,due to the existence of information costs and incomplete laws and regulations,there is the phenomenon of information asymmetry between listed companies and investors.In addition,there is much noise information in the market which affects the investors to make reasonable investment decisions.Under such information environment,it is difficult for investors to produce the correct judgments with the current business situation and future development prospects of listed companies.Its unwise trading behavior makes the stock price of listed companies deviate from its intrinsic value,results the valuation errors and low information efficiency of the capital market.This paper examines whether institutional investors obtained effective information from site visit,whose behavior makes the information into the stock price,and affects the effectiveness of capital market information.This paper takes the A-share listed companies of Shenzhen Stock Exchange from 2012 to 2016 as a sample to study the effects of institutional investors' site visit on information efficiency of capitalmarket.Firstly,this paper uses the residual income model(RIM)to estimate the intrinsic value of the stock,compares it with the stock price,constructs the index of the capital market bias to measure the efficiency of the information efficiency of capital market,and studies whether site visit reduces capital market valuation errors.Besides,this paper further studies the influence of institutional investors on the valuation bias of capital market based on different information disclosure quality.Through the multiple regression analysis,this paper draws the following conclusions:(1)Institutional investors' site visit reduces the valuation bias of capital market.(2)In the poor quality of information disclosure companies,the effect of institutional investors' site visit on the valuation of capital market is more significant.(3)For companies with higher R&D investment,the effect of institutional investors' site visit on the valuation of capital market is more significant.Finally,this paper summarizes research conclusions,and put forward several suggestions based on the theoretical and empirical analysis.Besides,the paper expounds the future research directions and shortcomings.