Research On The Influencing Factors Of Overreaction Of Chinese Concept Stocks

Since 2015,the Chinese concept stocks set off a new wave of privatization delisting.I observed that most of the Chinese concept stocks early listed on the US stock market had good performance.However,in recent years,the development of Chinese concept stocks companies in foreign countries is not optimistic under the situation.On April 26,2011,the "LFT " was short,which detonating the Chinese concept stocks short tide.Since that,some short institutions mainly including muddy water companies and citron research frequently "Short " China stocks,resulting in international investors greatly reduced confidence on the Chinese concept stocks plate.Based on this background,the paper argues that it is necessary to re-study the development course of Chinese concept stocks.I found that the early performance of the Chinese concept stocks is likely to be due to the positive impact of China's economic miracle leading to international investors to see the Chinese stocks more.In the transnational information asymmetry of the background,later some low quality Chinese stocks are short,which leads to the wrongly kill the entire Chinese concept stocks plate.Therefore,the paper decides to study the overreaction of China's concept stocks based on the perspective of "China's economic miracle" and the asymmetry of transnational information,with a view of enriching the information asymmetry theory and the over-reaction of China's concept stocks theory results,and provides decision-making reference for Chinese enterprises choose the way of listing and adapt to the US capital market regulation and information disclosure system and how investors understand the excessive response of the stocks.In view of this,this paper uses the panel data mixed effect regression model to test the extraordinary performance of Chinese concept stocks in 2005-2007.Based on the April 26,2011,the paper takes that the LFT was shorted as the event node.The paper used the case study method to prove that the Chinese stocks were subject to the reverse selection and negative reaction of the international investors and then comparatively analyze negative overreaction degree between narrow sense of Chinese stocks and the generalized Chinese stocks.The paper draws the following conclusions:The macroeconomic prosperity index is positively correlated with the positive excess rate of return of the Chinese stocks in the US capital market,and proves that the Chinese stocks have a regular and extraordinary performance in 2005-2007 because of In the context of transnational information asymmetry,due to the differences in the capital market system and the real reasons for the rapid growth of China's economy is not clear.the international investors on the Chinese concept stocks plate positive overreaction;by the “LFT” is short,international investors had a negative reaction to the Chinese concept stocks,and the negative reaction of the Chinese stocks in the narrow sense is far less than that of the generalized Chinese stocks,which mainly due to after some Chinese concept stocks companies suspected financial fraud,low audit quality,incomplete or false information disclosure are short,the investor's cognitive and psychological bias led international investors do not trust on the Chinese concept stocks plate as a whole.According to the research results,the paper puts forward the specific policy suggestions from the following aspects:From the perspective of the supervisors,we should speed up the convergence of the cross-border audit supervision and cooperation standard between US and China,optimize the external supervision system,construct the multi-party coordination mechanism,build the audit credit culture,strengthen the audit quality control.Companies should be listed on the market motives and adapt to market rules.They should establish and improve internal control and improve the corporate governance system,timely make information disclosure and strengthen communication with investors.From the perspective of the investors,we should reduce the cognitive and psychological bias and cultivate investors rational.we should Clear social responsibility and regulate the behavior of institutional investors.